Credit Monitoring Services: Meaning, Importance & Benefits

You may be aware that financial fraud in India is on the rise with as many as 50,000 cases of identity theft reported in 20203 alone. Victims mostly discover the damage only after knowing that their CIBIL scores take a dip sharply. In this digital age where your financial security is at constant risk, you must implement the best credit monitoring services to protect your financial future.

Your financial opportunities are determined by credit score and it also reflects your creditworthiness. This means, banks and financial institutions shall approve your loan, mortgage or credit card applications based on the credit scores. If you have a high credit score, you can avail of lower interest rate, higher credit limits and better terms. The opposite happens when you have a low credit score. So credit score essentially is a key factor in accessing financial products and you can avail of best credit monitoring service consumer reports to stay updated as managing finances impacts your daily life.

This blog aims to help you find best credit score monitoring services to safeguard your financial future.

What is a credit score?

Let us understand what a credit score is to know how to safeguard it. A credit score is essentially a three-digit number that rates your creditworthiness. The summary of your credit report is called FICO score. It measures how much credit you have and the duration besides what is the balance credit and if you have paid on time. Your credit history would include information like the number of accounts, total level of debts, repayment pattern and other factors. Fico scores range from 300 to 850. So, the higher the score, the more probability of getting approved for loans and for better rates.

What Is Credit Monitoring?

Credit monitoring is a service that shows your credit report and helps you with information regarding your new credit inquiries. It is an important tool that ensures protection against identity theft and allows you to maintain a good credit score. Therefore, you can plan to apply for a loan or a mortgage as this handy tool monitors your credit score.

This credit tracker identifies changes in your financial data and alerts your lending source regarding fraudulent behaviour or creditworthiness. Thus, if your credit card gets lost or stolen, this credit tracker will help you detect the various buying patterns. It will send you a heads-up to keep you notified about suspicious handling.

What are the benefits of credit monitoring?

Credit score monitoring companies provide an essential service of tracking credit reports which varies from one company to company. This tool helps you to understand any fraudulent activities on your account so that you can take necessary measures in advance. 

Here are the benefits of credit monitoring -

Prevents Identity Theft

Posing a major problem, to counter identity theft, and you must pay close attention to prevent credit card fraud. As per the Reserve Bank of India (RBI), there were over 29,000 cases of credit and debit card fraud described during the financial year 2023-2024. This is a whopping increase of 334% credit card threats compared to the previous year and you will be shocked to know that the total financial impact of these frauds was approximately ₹1,457 crore. To prevent worsening of your credit score reports, you must request the credit monitoring departments in companies to use the credit monitoring tools for safeguarding your hard-earned finances.

These credit score monitoring companies can help you to fix your credit with the credit reporting institutions within time. Some credit monitoring companies charge you a bit extra to get specific information for the same and notify you regarding any suspicious activity that can lead to credit card fraud.

Helps in Controlling Your Finances

Every individual needs to plan their finances in advance to ensure a secure life in future. If you lack managing your finances well, you shall have a low credit score, and this is a reason for difficulty in applying for loans. A credit monitoring service signals you about your credit score changes helping you to fathom how financial transactions affect your credit score.

 These credit monitoring companies can help you make better financial decisions in future. Moreover, they assist you to analyse your credit health about the areas that require monitoring thereby helping you decide on corrective measures.

Monitors Credit Queries

The credit monitoring companies help you to receive alerts and information most relevant to you beside customising updates. This company credit monitoring tool will monitor credit inquiries on your behalf if you are looking for a loan. It will inform you if applying for a loan is possible depending on your credit card score.

Facilitates Customising Your Notifications

If you have been a victim of credit card fraud in the past, you can request the credit monitoring company to send you alerts if there is any suspicious activity noticed. With the comprehensive services of these credit score monitoring companies, you can customise notifications, alerts and reports that you receive from them. And for loans, they will help you in sending information regarding the best rates depending upon your financial condition.

Locks Credit File

This convenient tool helps you to lock and unlock your credit file to safeguard you from any financial fraud. Since it might take time to do it manually, certain credit monitoring companies have apps you can use to lock and unlock instantly.

Warns About Deed Frauds and Address Change Scams

This monitoring service safeguards your assets, such as home titles and investment accounts. Major fraud, such as deed fraud, is where a fraudster illegally transfers your property or asset to their name without your consent or knowledge. Some credit monitoring companies monitor public records and alert you if anyone tries to do this illegally.

What Is the Importance of Credit Monitoring Services?

If you use credit cards regularly, you need to choose a credit monitoring services company. Besides keeping a strict eye on your accounts, it will also manage it efficiently.

Let us discuss a few importance of credit monitoring:

• Credit monitoring companies recommend improving your credit score when your score is low. A credit report is formed when you apply for a loan and repay it accordingly. This report is available with the credit monitoring company in India like CIBIL or Credit Information Bureau India Limited.
• If you love shopping, a credit monitoring service will notify you whenever you overspend. And this helps us to keep a credit watch or control our finances.
• Identity theft insurance is another significant important service credit card monitoring companies provide. A criminal can gather personal information and:

1. a) Open credit ranks in your name at financial institutions
2. b) Apply and take loans in your name.
3. c) Open new credit cards with your identity.
4. d) Scam other companies to illegally get credit in your name without your knowledge.

The good thing is that credit card monitoring companies reimburses the money you spend on recovering all your financial identities and improves your credit reports. These service charges include legal help to claim your phone bills.

Regularly monitoring your credit score helps you quickly detect signs of identity theft and unauthorised activities, allowing you to take action before they cause significant damage. It also keeps you informed of any changes in your credit report, helping you maintain control over your financial health and readiness for credit applications.

Who benefits from Credit Monitoring services?

Everyone is susceptible to credit card fraud so requires credit monitoring. Some specific individuals or groups are at a higher risk like:

• Elder Individuals

They are one of the most common targets of credit card fraud because most of them are not a pro with the modern trends of using apps and software and so they easily fall into the fraudster’ s trap.

• Young Adults

A 2023 report from the Federal Trade Commission shows that people in their late twenties to early thirties are significantly more likely to report identity theft and credit card fraud compared to other age groups. This group’s high online activity and social media usage and other apps make them vulnerable to fall prey to these scams easily and are often targeted through phishing schemes, social engineering threats and others.

So a credit watch is very essential to individuals at high risk of credit frauds and benefit you immensely. You can also opt for free credit monitoring services for safeguarding your finances.

Conclusion

Hackers and credit card fraudsters shall continue to access your credit card by trying to gather necessary details to make illegal transactions in your name. While it is impossible to stop data breaching, taking some measures to protect yourself from the effects of breaching shall go a long way into your future finances. Credit monitoring companies shall help you to safeguard your confidential information from fraudsters and the need for such services are increasingly becoming a necessity.

FAQs

Q1.Can I use free credit monitoring services to check my credit score?

Ans. Federal law allows you to get a free copy of your credit report every 12 months from each of the three nationwide credit bureaus. Also, the three bureaus have permanently extended a program that lets you check your credit report from each once a week for free at AnnualCreditReport.com

Q2. How important is credit monitoring?

Ans. It benefits you to identify changes, updates, and irregularities. Credit monitoring is a proactive way to keep track of your finances and get notified when inaccuracies, potential frauds or signs of identity theft appear on your report(s). Credit monitoring services help you in securing your financial accounts and minimises all the above negative impacts on your credit score.

Q3. How much does credit monitoring services cost?

Ans. Credit monitoring services costs vary by the service you choose. The main two types of credit monitoring services are basic and premium. Basic services are free to use and do not require you to enter a credit card at sign up, whereas premium services cost anywhere from Rs 10,000 to Rs 20,000 per month.

Q4. Which are the credit monitoring companies in the country?

Ans. In India, the three main credit monitoring companies are:

1. TransUnion CIBIL
2. Experian India
3. CRIF High Mark:

These companies are licensed by the Reserve Bank of India (RBI) to operate as credit information bureaus in the country.