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Credit Monitoring Service

Reviewed by Sujaini | Updated on Apr 15, 2021


What Is a Credit Monitoring Service?

A credit monitoring program monitors changes in borrower's conduct to identify potential fraud, as well as improvements in their creditworthiness. For example, credit monitoring services may provide protection against identity theft when personal information of an individual is stolen and used for nefarious purposes without the consent of the person.

When a credit card is stolen and used, the different purchasing habits should be identified by a credit monitoring service and the credit card account holder alerted.

How Credit Monitoring Works?

While customers use credit monitoring services mainly to protect against identity theft, a credit monitoring service often monitors the credit report and credit scores of a customer. Criminal identity theft-related activities can range from fraudulent retail or online transactions using a stolen credit card number to making false social security or Medicare claims.

Since criminals use this information without the knowledge of the victim, it can be difficult to detect such criminal activity until well after the fact, by which time the reputation of a person could be completely destroyed.

What Activities are Considered Suspicious?

Credit monitoring systems inform customers of changes in their credit behaviour, such as when a new account has been opened or when a major transaction, such as purchasing a vehicle, has been made. In addition, some credit monitoring services offer more extensive tracking of credit scores, which keeps customers up-to-date on credit quality.

This method of monitoring helps the account holder to plan ahead and fix any problems that could hinder significant credit-based activities, such as applying for an automobile loan or a mortgage. Fraudsters use the methods of social manipulation to collect personal information from individuals to commit identity fraud. These are phishing, catfishing, tailgating, and baiting strategies. Features and pricing vary from service to service.

Some financial institutions provide free services that track credit scores on a limited basis while other paid services provide more detailed scans that collect data on a consumer's bank account, credit card, or Aadhaar number over the internet.

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