About 17.6 million Americans, ages 16 or older, were victims of identity theft in 2014, according to the Bureau of Justice. While having this happen to you isn’t entirely preventable, there are steps you can take to help stay aware of your finances and look for potential signs your identity has been stolen. One of these ways is by monitoring your credit.

It’s smart to stay on top of changes in your credit throughout the year by checking and monitoring your credit reports. A mistake or mix-up in your credit file could hurt your credit score, as could credit missteps that you make on your own, so monitoring your credit can be beneficial in all sorts of ways. There are a few ways to do so, many of which come at no cost to you.

Using Free Credit Monitoring Tools Yourself

Luckily for consumers, getting a free copy of your credit report each year from the three major credit reporting agencies – Equifax, Experian and TransUnion – is easy and you’re entitled to them under federal law. You can order and review your credit report online or request that a paper copy be sent to you in the mail.

Review each copy of your credit report carefully. Report errors and suspected fraudulent activity immediately. This step-by-step guide will show you how.

In addition to monitoring your credit reports from each of the major credit reporting agencies, it’s a good idea to monitor your credit scores. You can see two of your credit scores for free on Credit.com, as well as a breakdown of your credit strengths and weaknesses. And you’ll be happy to know that checking your own credit will not damage your scores in any way.

Using a Credit Monitoring Service

There are also professional credit monitoring services that will watch your credit reports and let you know if there are any notable changes. This can include improvements because of your personal behaviors, like improving your payment habits or credit utilization ratios, or suspicious activities that could be signs of fraud. These services may even monitor for any accounts that are opened in your name or if any of your credit cards get maxed out. This way, you’re made aware of a potential problem and can take immediate action. This is an option many people consider after their accounts are compromised — like after identity theft or a data breach — and may or may not come with a fee.

Why These Things Matter

Keeping your credit history accurate and up-to-date is an important financial tip. Who wants to pay more than necessary the next time they apply for a credit card, mortgage or car loan?

And it’s important for your peace of mind. If there is a mistake in your file, it is up to you to fix it. Many people decide to monitor their credit to battle identity thieves. If a thief opens a new credit account in your name, these tools can be your first alert system and you’ll need to take steps to clear your credit reports from any fraudulent information.

Having an accurate and error-free credit report is especially important if you plan to apply for a loan in the near future. After all, the better your credit, the better the terms and conditions you’ll be eligible for.

This article has been updated. It was originally published on June 4, 2014.

If scammers or thieves intercept your personal financial information, like your Social Security number, date of birth or credit card information, and then open a credit account or loan in your name, you’ll have a credit mess to clean up. While you can’t entirely prevent this from happening, there are steps you can take to spot problems right away.

How Does Identity Theft Happen?

Identity theft can happen at restaurants, small businesses, through skimmers at ATMs, and online — the possibilities are endless.

An identity thief may also nab your personal financial information by swiping bank and credit card statements, as well as other sensitive documents from your mailbox. That’s why it’s so important to shred documents with personal information and account numbers before recycling them.

Your credit and bank accounts can also be compromised through a data breach.

Yikes. What Can I Do?

With so many ways for your credit record to be hurt by a thief or fraudster, it’s important to develop good credit monitoring practices.

One way you can do this is by checking your credit scores on a regular basis. You can do this for free on Credit.com. An unexpected change in your credit scores may signal something is amiss with your credit. And you’ll be able to act quickly to help stop a fraudster from hurting your credit.

Another way to monitor your credit for free (thought not as frequently) is by requesting a free annual credit report from each of the three major credit reporting agencies — Experian, TransUnion and Equifax. Here’s a quick guide to doing just that.

What Is a Credit Monitoring Service?

While those two free options are great, there is more you can do if you want to monitor your credit around the clock. This is likely something you’ll want to consider if you have been a victim of identity theft, an online scam or a data breach. If that’s the case, you may wish to sign up for a paid credit monitoring service.

With credit monitoring, you’ll receive updates on any changes to your credit file. So, for example, if a credit card was opened in your name, you’ll know about it, whether you are the one who opened the account or not.

How Do I Choose a Credit Monitoring Service?

The most important thing is to decide what you want from the service and then shop around to see what different ones offer. Credit monitoring services and prices vary, so shop wisely and be sure to carefully read the terms before signing up. Aside from price, you’ll want to see what the monitoring service covers. Some services only monitor reports from one or two bureaus while others monitor all three, so decide what you want and narrow your search from there.

How Can Credit Monitoring Benefit Me Down the Road?

It’s easy to see how monitoring your credit, whether through a service or a free tool, can help you in the moment. But credit monitoring can pay off in a big way in the future.

Identity theft is a multi-billion dollar business and scammers can drain your wallet in several ways. They can do damage to your credit that can cost you money when applying for a loan and they can also take money that belongs to you, filing for tax refunds in your name. Monitoring your credit can help you spot a problem so you can act quickly, limiting the impact on your finances so you don’t have to repair your credit.

This article has been updated. It was originally published June 4, 2014.