Credit Monitoring Is an Important Consumer Tool

November 11, 2020

If you explore the “consumer tools” and/or “advice” sections of the three major credit reporting agencies’ official websites, you’ll find a lot of discussion about the importance of credit monitoring.

For example, TransUnion’s official site advises consumers that credit monitoring services act as “both a personal assistant and watchdog when it comes to your credit.”

Having a credit monitoring service watching your credit report is an extremely useful tool for those who are in the planning stages of a mortgage loan. You’ll want to know if there are issues appearing in your credit report that could stop or even cancel your home loan. What kinds of issues?

Credit Report Problems You May Encounter

Imagine someone else with a name similar to yours having their credit data accidentally showing up on your credit report. It sounds far-fetched, but happens more often than you might think. And that’s an issue that potentially takes months to correct. Not something you want surprising you two weeks before you’re supposed to start applying for a home loan to purchase a house you really want.

How does the “watchdog” aspect of credit monitoring work?

A credit monitoring service may be configured to send you alerts when there are changes to your credit or your accounts. Are new accounts being opened in your name without your knowledge? 

Has negative credit information shown up on your credit file since the last time you personally checked up on it? Have one of your creditors accidentally or on purpose submitted negative credit information on you?

Credit monitoring puts this data in front of you as often as you like and can be automated to help keep you updated via email, mobile apps, etc.

Free Versus Subscription-Based Accounts

There are free options available for consumers to use in this manner, but these free services may not provide the comprehensive reporting you will need in advance of your home loan application. You definitely want to know what a potential creditor may see on your credit report--if you don’t know the contents of your credit file, you are NOT READY to apply for a home loan.

Remember, credit report issues should be detected as early as possible for best results when planning for a mortgage loan. Don’t stay in the dark about your credit score, your credit activity, and any potential identity theft issues that could affect your account.

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