CREDIT MONITORING Is It Right For You?

by Team IWP! on 29. Apr, 2009 in Personal Finance Investing

By Freddie Taylor

Credit monitoring services allow you to closely track the information pertaining to your credit. As we know, credit is very important in the lives of Americans, and especially real estate investors, as it is our credit that helps determine our loan interest rates and whether or not we will even get a loan.

Credit monitoring services offered by the big three (TransUnion, Equifax, and Experian), give consumers instant access to their credit reports 24 hours a day, 7 days a week via the internet.

How it Works: For a monthly service charge, you can access and view up to three of your credit reports at once via the internet. You can gain a useful perspective on your credit situation and future while checking for inconsistencies, scores, and trends. You can also contest these discrepancies and change inaccuracies.

The Benefits: As a personal victim of identity theft, one of the country’s fastest growing crimes, the credit monitoring service has been extremely helpful. Every time something changes on my credit report, I receive an email notification. Therefore, if someone tries to open an account in my name, I am immediately notified and I can take the appropriate action to quail the situation and have the credit card or loan stopped and removed.

Downside: The cost. Anything of value comes with a price. In the case of credit monitoring, you can expect to pay anywhere from $7 to $20 per month, depending on the number of credit bureaus you want to monitor and from whom you get the service.

An Alternative: Consumer Reports indicates the credit monitoring service as useful, but acknowledges credit monitoring can be done for free on your own. All it takes is a little awareness of your rights as a consumer, some time, and effort.

Here is what you have to do:

Take advantage of your Free Annual Credit Reports. All

consumers are allowed one free credit report each year from

the big three; TransUnion, Equifax, and Experian. Visit this

government sponsored website for more information,

www.AnnualCreditReport.com

Space your request out 4 months apart. Since you are due

three free credit reports (one from each credit bureau),

simply request one from each bureau every 4 months, which

encompasses an entire year.

Analyze the reports. Note any discrepancies, have them

changed by writing a letter to the credit bureau with the

appropriate supporting documentation, and request the same

from all reporting agencies.

Receive an updated report. Each credit bureau should send

you an amended credit report. At the very least, they will

respond to your request for amendment.

Bottom Line: I like the convenience of being able to constantly check my credit and receive my score. Therefore, I opted for a credit monitoring service with the right to view all three of my credit reports at once. Sometimes I check my report everyday. I do this for two reasons- 1) because I can and 2) inquiries derived from me checking my credit via a credit monitoring service don’t affect my score and aren’t reported on the credit report.

Before getting a credit monitoring service, I thought it was a waste of money and of no use to me. Then I found myself in a conversation with Jabbar Muhammad of Credit Builders International, a strong believer in the importance of credit and the credit monitoring services. He asked, “Do you have a cell phone that you pay a monthly service fee for?” I replied, “Yes, who doesn’t have a cell phone these days?”

Mr. Muhammad then asked, “Don’t you think your credit is worth more than a cell phone?”

Well, I think in our economy, credit outranks the mighty cell phone. I opted for a credit monitoring service the next day and have been very happy with it ever since.

If you don’t sign up for a credit monitoring service, at the very least take Consumer Report’s advice and monitor your credit yourself. It is not as difficult as you may think, and as a real estate investor, please remember your credit is very important.

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Freddie E. Taylor, MBA is the owner and Certified Residential Appraiser with Appraisals by Taylor, Ltd. Email questions, comments, and suggestions to ftaylor@abtchicago.com

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