What is credit monitoring? Check and monitor your credit report

Your credit report is an indication of your overall financial health. It assesses your payment and credit history and gives you a three-digit score based on your information. It's a good idea to monitor your financial well-being regularly, such as reviewing your budget, expenses, and short- and long-term goals.

Monitoring your credit report is also an important activity for your financial wellness check. Your credit score can help you secure better interest rates on loans, increase your chances of loan approval, and give you access to credit cards with good rewards. Monitoring your credit report also protects your identity and prevents potential fraud.

Let's dive into the importance of credit monitoring and how to check your credit report to keep your funds and identity safe.

What is a credit score?

Your credit score is a three-digit number given by credit bureaus to provide credit card issuers, lenders, and other financial institutions with your financial well-being. Credit scores are calculated based on information about your payment history, credit utilization, credit accounts, and personal information. The average credit score for a Canadian is around 680. An excellent credit score can help you secure loans, get approved for financial products, and better interest rates. It can help you save money in the long term as it makes borrowing cheaper.

What is credit monitoring?

Nowadays, many things depend on your credit report. Whether you want to get loan approval, buy a house, get insurance, or open a new bank account, financial institutions may look at your credit.

Some jobs also look at your credit profile, such as accountants, financial planners, lawyers, and government jobs. Monitoring your credit year-round ensures your information is up-to-date and accurate. You can track changes in your financial information and credit behaviour to ensure you're on top of your accounts.

What is a credit monitoring service?

A credit monitoring service regularly monitors your credit information year-round. It gives you frequent access to your credit history and alerts you of suspicious activity, such as a new account in your name, a large purchase like a car, or a late payment reported by one of your creditors. If you aren't familiar with these changes, you can remedy the situation immediately to prevent negative consequences. Credit monitoring services are a great way to stay on top of your credit report, keeping you informed and on track to building a healthy credit score.

Is credit monitoring important?

Regularly monitoring your credit keeps you informed on your credit score and report and helps guard you against identity theft. Identity thieves use social engineering techniques like phishing and baiting to steal your personal information.

They can access your bank accounts, credit accounts, social insurance number, addresses, and more. Once fraudsters have your information, they can commit fraud, which is quite dangerous as you don't want to be accused of illegal or suspicious activities. They can also use your payment information to spend money from your accounts.

Credit monitoring is a preventative action to detect changes in your spending patterns and information, and you can receive alerts of any warnings or concerns. If you're unfamiliar with any of the changes in your credit report, it's definitely a concern to address immediately to prevent identity theft and fraud. Especially as the world becomes more digital and identity thieves become more clever, it's important to protect your personal information and the quality of your credit score.

What do credit monitoring services offer?

Alerting you of suspicious activity to your credit report is one of the basic features offered by credit monitoring services. Every credit monitoring service has unique ensure your credit report is accurate. For example, you may have access to credit scores and credit reports. Some services offer premium features, like identity theft protection, dark web surveillance, and restoration assistance. You can research the various credit monitoring services and features available to decide how you want to protect yourself and lower the risk of identity theft and fraud.

Do I need credit monitoring services?

Credit monitoring is optional but important as it can save you from dealing with stressful situations like getting your identity restored after it's been stolen.

You may not be aware of your credit report if it's not something you regularly think about. However, your report contains sensitive information you want to keep out of the wrong hands.

Finding a reputable credit monitoring service can prevent headaches, especially when data breaches are becoming more common.

Are credit monitoring services free?

Your credit card issuer or financial institution may provide complimentary credit monitoring services. Other providers may have a free credit monitoring service with basic features, like alerts and credit reports. If you're interested in more features, you can pay a subscription fee to get the upgrades.

Depending on your needs, the free version may be sufficient. However, if you're concerned about identity theft, or if you're identity has been stolen before, you can always choose to upgrade to get more extensive features and protection.

How to choose a credit monitoring service

There are many credit monitoring services available, so it's important to do your research and choose one you feel comfortable using. Consider factors like how much you'll pay for the service, the features included, how to cancel the service if you don't want it anymore, and what happens if the service doesn't protect you. You can always compare different credit monitoring services and reach out with questions to help you make an informed choice.

You can do a few credit monitoring activities on your own without relying on a professional service. Here's how you can protect yourself so you don't fall victim to identity theft.

Credit freeze

A credit freeze is one of the best ways to protect yourself from fraudulent credit applications. You can control how a consumer reporting agency can sell your financial data and prevent creditors from accessing your credit file. It's free to initiate a credit freeze, and you can do it online or by phone. It's also quick to unfreeze your credit file.

Check the personal details of your credit report

Most people may focus only on the three-digit credit score they get in their report. However, your credit report contains a lot of information about your credit and payment history, the types of accounts you have, and sensitive personal information that can be used to identify yourself. You can get free reports on a weekly or monthly basis, such as an Equifax credit report. Dispute any errors you find to ensure the accuracy and validity of your report.

Check your credit card statements

It's a good idea to check your loan and credit card statements periodically to ensure you recognize all transactions. If you see something out of the ordinary, it may indicate that someone has your bank account numbers. You can report the incidence to your credit card issuer and they'll likely conduct a fraud investigation. The earlier you catch suspicious behaviour, the less likely you'll face serious consequences.

Building good credit with KOHO

If you're looking to improve your credit score and monitor your report for any concerns or red flags, look no further than KOHO. You can get a free credit score and extra insights to help you understand your credit report. Use these helpful tips to improve your score and get benefits like lower interest rates and more credit options. You can also use your report to regularly monitor your spending habits, payment history, and personal information and stay alert for any unexpected changes.

A healthy credit score in Canada can range anywhere from 660 to 760 and up. Don't worry if you're not there yet. We know it takes time to build your credit report, which is why we make it easy for you to build your credit with KOHO using a secured line of credit, a KOHO line of credit, or both.

Want a credit card that gives you the convenience to shop whenever and wherever? The virtual credit card has no waiting or credit checks. You have guaranteed approval for instant spending. You can also apply for overdraft protection coverage, which gives you up to $250 interest-free cash advance in case you go over your limit.

Whether you're looking to earn interest and reach specific savings goals or create a strong foundation for your future, learn about how KOHO can help you.