credit monitoring
A service that alerts you to changes in your credit report such as new accounts, inquiries, or score changes.
Example
“Credit monitoring alerted her within hours that a new account had been fraudulently opened.”
Memory Tip
MONITORING — automated surveillance of your credit file. Early warning system.
Why It Matters
Credit monitoring helps you catch identity theft and fraud quickly before criminals can do serious damage to your financial reputation. By staying informed about changes to your credit report, you can dispute errors or unauthorized accounts promptly and protect your ability to get loans at good interest rates.
Common Misconception
Many people believe that checking your own credit with a monitoring service will lower your credit score, but this is false. Monitoring your own credit is a soft inquiry and has no impact on your score, unlike hard inquiries from lenders that do count against you.
In Practice
Sarah signs up for credit monitoring and receives an alert that a new credit card account was opened in her name that she did not apply for. She immediately contacts the creditor and credit bureaus to report the fraud, preventing the criminal from charging the 5,000 dollar limit and protecting her 750 credit score from dropping significantly.
Etymology
From Latin 'credere' meaning to trust plus Latin 'monere' meaning to warn.
Common Misspellings
Check your credit score free — no impact
Related Terms
More in credit
Other credit terms you should know
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