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A good credit score can help you set a firm financial foundation for your life. Besides making it easier to qualify for loans and credit cards, it can also influence decisions by employers, landlords, utilities and insurance companies.
One of the most effective ways to improve your credit score is to monitor it. Regularly monitoring your credit can help you ensure your credit report is accurate and take steps to increase your credit score. Here's how credit monitoring can help you boost your score.
How Does Credit Monitoring Work?
Credit monitoring helps you track your credit report for important changes and alert you when there is new activity, potentially informing you of the early indications of fraud.
Some monitoring services also keep an eye on modifications to your credit score. When your credit scores are updated, your monitoring service will typically alert you via email, text message or phone.
For example, most credit monitoring services will inform you if someone performs a hard credit inquiry on your credit report for a new loan application. Other adjustments a credit monitoring service might track include:
- New accounts
- High credit card balances and credit utilization ratio
- Missed payments
- Credit score changes
- New negative credit information, including bankruptcies and collection accounts
- New names, addresses or other personally identifying information
These alterations to your credit report could impact your credit scores. But by receiving alerts of new credit report changes, you can take fast action to help you maintain a positive credit history.
What Credit Monitoring Doesn't Do
Think of credit monitoring as a daily watch on your credit report that warns you of any changes that may stem from fraudulent activity. Of course, credit monitoring can't stop someone from trying to steal your identity or access your accounts. It also doesn't guarantee your credit will improve. Generally speaking, here's what credit monitoring services don't do:
- Prevent someone from applying for new credit using your identity
- Stop someone from applying for a job in your name
- Alert you when someone tries to open a utility account in your name (unless the utility performs a hard credit inquiry)
- Safeguard your personal information from data breaches
- Fix credit report errors or carry out the work to improve your credit
- Place fraud alerts and credit freezes
While credit monitoring has its limitations, it excels in warning you of problems so you can take action. For example, you might receive an alert of a new account on your credit report. The alert could reveal that someone is using your identity without your consent if you don't recognize the new account.
How to Increase Your Credit Score With Credit Monitoring
One of the easiest steps you can take to improve your credit score is to sign up for a credit monitoring service. These services can help you spot and dispute errors on your credit report and track your credit score, so you always know where you stand. By knowing what exists on your credit report, you can take specific measures to improve your credit.
Additionally, a good credit monitoring service can show you which scoring factors are affecting your credit score, for better or worse.
For example, if you rack up a lot of credit card purchases in a month and don't pay off your balance, your score could drop. In this case, a good credit monitoring service may show your credit utilization percentage—the amount of credit you're using compared with your credit card limits—and the positive effect that lowering your credit card balances could have on your credit score. Remember, your credit utilization ratio is a very important factor in your FICO® Score☉ , which is used by 90% of top lenders.
Experian Boost®ø is a free feature you can use to lift your FICO® Score instantly. The service works by adding your on-time payments for utility, phone and streaming services to your Experian credit file.
Once you connect your service accounts with Experian, Experian Boost will identify which payments to add. The feature only considers positive payment history, so you don't need to worry if you have a late payment or two on your Experian Boost accounts.
Consider Signing Up for Experian Credit Monitoring Services
If you're thinking about signing up for a credit monitoring service, compare Experian's two credit monitoring plans: CreditWorksSM Basic (free) and CreditWorksSM Premium (paid)—to see which package best suits your needs.
For a free service, CreditWorks Basic is feature-rich and robust. Some of the things that'll be monitored for you include:
- Monitoring of your Experian credit report
- New account inquiries
- Changes in account balances
- Credit utilization information
- Positive activity
- Dormant accounts
You'll also receive your FICO® Score, your Experian credit report, score tracking and alerts, and Experian Boost.
Experian CreditWorks Premium is priced at $24.99 per month, and it delivers all the features that come with CreditWorks Basic, plus a full suite of valuable perks and benefits, such as:
- FICO® Score from all three credit bureaus: While CreditWorks Basic shows your Experian FICO® Score only, the Premium package gives you access to your credit scores from the three major credit reporting agencies: Experian, TransUnion and Equifax.
- Daily access to Experian credit report and credit score: If you're working on improving your credit, it helps to have the most up-to-date information. With CreditWorks Premium, you'll be able to view updated versions of your Experian credit report & FICO® Score every day instead of the monthly updates the Basic package offers.
- Additional FICO® Score: Did you know there are at least 16 specific FICO® Score versions creditors use to make decisions on financial products like credit cards, mortgages and auto loans? While the CreditWorks Basic package shows you your FICO® Score 8, you'll have access to additional FICO® Score calculations with CreditWorks Premium.
- FICO® Score Simulator: This valuable tool removes the guesswork from your credit decisions and helps you make informed ones. You can enter specific actions and see how they might impact your credit score. For example, you might see how your score could change if you close your oldest credit card, take out a new mortgage or pay off your car loan.
- Identity theft monitoring and protection: CreditWorks Premium comes with a suite of powerful identity protection tools that could save you substantial time and money if you became a victim of identity theft. The benefits include:
- Dark web surveillance
- Identity theft insurance up to $1 million
- U.S.-based fraud resolution specialist
- Lost wallet assistance
- Identity theft monitoring and alerts
Monitoring Your Credit Can Help You Build and Maintain Good Credit
Monitoring your credit can alert you to credit-related issues early on so you can take quick action to remedy them. Additionally, keeping track of your credit can help you understand how your actions influence your credit score and what steps you can take to resolve issues right away. In short, credit monitoring can help you improve and maintain your good credit.
If you're contemplating signing up for a credit monitoring service, take the time to carefully review and compare your available options. To maximize your protection, consider getting a service such as Experian CreditWorks Premium that monitors your credit reports for all three major credit bureaus. Doing so will ensure you don't miss when new information appears on one report but not the others.