So much of our lives take place online, including things like paying bills, shopping, getting paid and even sending a friend money for your half of the lunch bill. With so much transfer of sensitive financial information online, it makes sense to be a little wary of what’s happening to your data and what it could mean for your finances.
Your credit score is the most common aspect of your financial life that can be hurt by malicious activity online. This critical number is calculated based on several factors, including how much of your total credit limit you’ve used, your payment history and the age of your credit accounts. The score helps lenders determine whether or not to lend to you and influences the interest rate you pay on a loan. The higher your score, the better off you’ll be, so it’s essential to keep an eye on your credit. The last thing you want is to find out that your credit has taken a hit because of stolen financial information when you’re applying for something like a home loan.
That’s where credit monitoring comes in.
Several well-known, trusted companies offer credit monitoring as a service that keeps tabs on your credit reports and alerts you to significant changes to suspicious activity. Then, you can take action to prevent further damage or try to reverse what’s been done. You can use one of these services to stay on top of changes to your credit score without manually checking it yourself all the time.
Credit monitoring essentially works as an alarm system for your credit. When it detects something is wrong, it alerts you so that you can take action. The sooner you’re able to address fraudulent activity by freezing your accounts or other preventive action, the more you can minimize harm to your credit and overall financial health. It’s important to note that credit monitoring does not fix the problems caused by stolen financial information, like recovering your identity or reporting fraudulent activity to financial institutions. Instead, it alerts you so that you can take the necessary steps.
Do I need credit monitoring?
Because everyone is vulnerable to having sensitive information stolen and used for fraudulent purposes, generally speaking, everyone can benefit from credit monitoring. A 2020 study showed that identity fraud reached $16.9 billion in 2019, and criminals are growing more sophisticated, making their efforts harder to spot and fix.
Credit monitoring services typically charge a fee, and that fee varies by the company you choose and the level of protection you get. There are basic services that are free to use but don’t offer the same protection as a premium service. Additionally, if your information was involved in a data breach, you may qualify for free credit monitoring service. Ultimately, it’s up to you to determine how much it’s worth to protect your information and financial health online. If you choose to pay for a service, make sure you’re doing business with a reputable company.
Every year, it seems like we spend more of our lives online in one form or another. With so much transfer of information and increasingly sophisticated criminals out there who are constantly creating new ways to steal your information and misuse it, it’s savvy to keep a close eye on your accounts, watching for signs of potential fraudulent activity. Your future self will thank you for your diligence, and credit monitoring is one way to ease a bit of the worry.
Finances FYI is presented by 1st Security Bank.
At 1st Security Bank of Washington, we take a customized and personal approach to your financial well-being. We live in the communities we serve, so our branches offer tailored solutions to their communities. We believe relationships make the difference, and that sets 1st Security Bank apart.