A Closer Look at the Significance of Credit Tracking

Every year, more Americans use credit cards to pay for their purchases. In the US, forecasters expect credit card use to increase continuously between 2024 and 2028 by 1.3 percent.

Unfortunately, using credit cards comes with risks, such as identity theft. To combat this issue, consumers should practice credit monitoring. Let us take a look at this approach and its importance among cardholders.

Credit Monitoring: What Consumers Need To Know

Credit monitoring involves tracking changes in your credit reports. Some consumers pay for credit tracking services to stay informed in the event of potential fraud and changes to their credit scores.

Through credit monitoring, you can protect yourself against identity theft. For example, suppose someone steals your personal information and credit card. If you are paying for a credit monitoring service, your provider can detect the new buying patterns and notify you about the changes.

While most consumers use credit monitoring services to protect against identity theft, some practice credit monitoring to track their credit reports and scores. 

While anyone can benefit from effective credit monitoring, some people will benefit more from it than others, including the following:

  • A person who was a previous victim of identity theft
  • A person affected by a data breach
  • A person with kids who will soon manage their own finances or elderly relatives who depend on them

A credit monitoring service will be beneficial for those with dependents because older adults tend to be at greater risk of fraud and identity theft

Why is credit tracking important?

Some may think they do not need credit tracking, and the service can be a waste of money. While some financial companies offer it for free, the pointers below highlight why a paid option can be worth it.

Prevents identity theft

Identity theft is a persistent problem that remains unresolved to this day. A 2023 study shows roughly 151 million Americans have been fraud victims at some point. This problem can worsen your credit score and history.

If you have a credit monitoring service provider, you can fix your credit with the credit reporting institutions faster for a fee. Additionally, you will immediately get a notification regarding any suspicious activity that may be linked to fraudulent activities.

Helps manage your finances

The most successful individuals plan their savings and expenses ahead of time to ensure a financially secure life in the future. Without proper finance management, you may suffer a low credit score, hindering you from applying for loans. 

A credit monitoring system will give you a clear idea of how your transactions impact your credit score. This advantage will help you to make better financial decisions and analyze your credit health.

Tracks credit inquiries

You may have to undergo a credit inquiry if you are applying for a loan. If you have a credit tracking system, you will have an idea of how the process will go because you can have updates about your credit anytime you need.

This information can assist you during the application process and help you find the best lender to send your application.

Protect Your Finances Through Proper Credit Monitoring 

Credit monitoring services can keep track of your credit profile and notify you of suspicious activity that could indicate identity theft. This issue can be expensive to address, so having this type of monitoring in place is a good idea. 

However, consumers must remember that not all credit monitoring services are the same. They must do their research to ensure they end up with a provider who can address their unique needs.

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