How to Select the Right Credit Monitoring Product
Whether you're looking to buy your first home, purchase a brand new car, or finance your child's college tuition, there's bound to come a time when you need to ask for a loan. But as any consumer who's been rejected for credit, not all loans are created equal. The specific terms and APR of your mortgage can make the difference between paying $200 or $600 dollars each month in interest - which could potentially add years and tens of thousands of dollars to your overall payment plan.
Yet many consumers don't take the key steps towards finding out how: which is knowing your own credit score, why it's ranked where it is, and what steps you can take to improve that score to get the best deals.
A good credit monitoring service can help you do just that.
A credit monitoring service helps you keep tabs on all things related to your credit reports and credit scores,
including debts (paid and unpaid), your credit history, and the risk factors that could sway creditors from extending loans to you.
Consider this scenario. You're in the market for a new home, a process that can take up to a year or longer. A solid credit monitoring service can keep you apprised of your credit health, allowing you to make the changes needed to get the highest credit score and thus the best loan and interest rate terms on your mortgage.
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Take these steps to choose the best credit monitoring service:
How long do you need your credit tracked? Not everyone's credit monitoring needs fit into one box. Some consumers may just require one credit report per year, while others may need a monthly report that updates them and tracks their progress on a regular basis. The latter group may include people trying to rebuild their credit or those who are especially vulnerable to identity theft. Make sure you have a time-frame in mind before you sign up for a credit monitoring service.
Make sure you get access to the three major credit reporting bureaus – Don't waste your time with any credit monitoring service that doesn't give you direct access to all three major credit reporting bureaus: TransUnion; Equifax and Experian. Creditors base their lending decisions on criteria from one or even all three of your credit reports, so you'll need data from all three bureaus.
Watch for high fees – By and large, a single report from any of the major credit reporting bureaus costs up to $20 for a "basic" report. A good monitoring service should get you all three reports for less than that. If you're looking at a service that can't beat that price, keep on looking. A quick note: Some credit monitoring firms, especially the newer ones, only offer "free" services for a single monthly trial period. After that, you can really start racking up the charges. So watch out for hidden fees and make sure you know up-front what fees you've signed up for.
Get good information – Just providing a credit score isn't enough. A decent credit-monitoring service can also provide explanations of why your scores are high or low, and offer some good advice on how to improve those scores.
Check carefully – Keep a sharp eye out for credit monitoring firms that tout their services via spam emails or other direct marketing campaigns. Good credit monitoring firms don't need to do that. Check your state's Better Business Bureau for the best credit monitoring services, or check with the Federal Trade Commission for more information.) You should also use websites that you trust like Credit.com, where we offer monitoring services from the top providers in the industry including MyFico and Equifax.
Keep a close eye on scams and frauds – Don't fall for the bells and whistles sales pitch they offer on most credit monitoring websites. As a consumer you are entitled to one FREE annual credit report every 12 month; anything over and above that – such as monthly monitoring, or 'fraud alert' plans – will cost you potentially hundreds of dollars, and is necessary (unless you have a real reason to believe that your information has been tampered with). Far better to save that extra cash, and apply it toward any outstanding debts.
Also, don't be pressured into a snap decision. Yes, you want to act promptly to address your debt problems, but take the proper time – and the proper steps – to find a reputable credit monitoring firm that can keep your credit rating on an upward path.