Introduction

Credit monitoring is an essential tool for anyone looking to maintain or improve their credit scores. At O1ne Mortgage, we understand the importance of good credit and are here to help you navigate the complexities of credit management. In this article, we will explore how credit monitoring works, its benefits, and how you can effectively monitor your credit to ensure financial stability.

Credit Monitoring Doesn’t Affect Credit Scores

One of the most common misconceptions about credit monitoring is that it can negatively impact your credit scores. However, this is not the case. Credit monitoring involves tracking changes to your credit reports and scores using automated services or regular manual checks. These actions are logged as soft inquiries, which do not affect your credit scores.

Soft inquiries are different from hard inquiries, which occur when a lender checks your credit in connection with a loan or credit card application. Hard inquiries can cause a small, temporary dip in your credit scores, but soft inquiries have no such effect.

Which Actions Can Affect Your Credit Score?

While credit monitoring itself does not affect your credit scores, certain actions can. Here are some factors that can negatively impact your credit scores:

• Making a payment more than 30 days after its due date or missing a payment altogether
• Running up balances that exceed about 30% of the borrowing limit on one or all of your credit card accounts

On the other hand, actions that can increase your credit scores include:

• Successfully managing a combination of different loan types (installment loans and credit cards, for example)
• Building a long track record of borrowing and debt repayment

How to Monitor Your Credit

Credit monitoring can help you track progress toward credit score improvement, but its main goal is early detection of unusual activity on your credit reports. Spotting anomalies early lets you follow up quickly with creditors or the credit bureaus to set the record straight. Here’s how to monitor your credit:

Review Your Credit Reports Regularly

Federal law entitles you to view a free copy of your credit report from each of the three national credit bureaus (Experian, TransUnion, and Equifax) at AnnualCreditReport.com. Check reports carefully for activity you don’t recognize (a potential sign of credit fraud) and for any information you believe to be inaccurate. You have the right to file a dispute with the relevant credit bureau regarding any credit report entries that may not be accurate.

Track Your Credit Scores

Sudden unexplained changes in your credit score can be a sign of unauthorized activity on your credit accounts or other issues, so it’s a good idea to check credit scores on a regular basis. It’s advisable to get scores based on data from all three national credit bureaus, and you might want to review your VantageScore as well as your FICO® Score.

You can check your FICO® Score based on Experian data for free or upgrade to a paid Experian CreditWorks℠ Premium subscription to get scores from all three national credit bureaus. Many credit card companies, banks, and online services also offer free access to FICO® Scores and VantageScores from one or more of the bureaus.

Enroll in a Credit Monitoring Service

Automated credit monitoring notifies you immediately of changes to your credit report, including those that can affect credit scores such as:

• The opening of new loan or credit card accounts in your name
• Applications for credit in your name
• Late payments reported on your accounts

Immediate notification can make you aware of unexpected credit activity faster than even the most diligent manual checking would, so you can respond as quickly as possible.

Free credit monitoring from Experian reports changes to your Experian credit report, and upgrading to an IdentityWorks℠ Premium account covers your credit reports at all three national credit bureaus.

The Bottom Line

Credit monitoring has absolutely no downside for your credit scores. It can help you chart your progress toward building up your scores and, if it helps you address fraudulent activity or misreported data, credit monitoring can even help you increase your credit scores. Experian offers credit reports and scores for free as well as free monitoring of your Experian credit report to help you get started.

At O1ne Mortgage, we are committed to helping you achieve your financial goals. Whether you need assistance with credit monitoring or are looking for the best mortgage options, our team of experts is here to help. Call us today at 213-732-3074 for any mortgage service needs. Let us help you secure your financial future.