Credit Monitoring and Credit Reports in Canada
Our lives are built around credit these days. You won’t find many people paying cash for everything. So our credit history can either make or break our lives. Of course, if it breaks us, it won’t kill us. But it’ll make our lives very miserable. So we’ve put together the top 10 credit monitoring questions, to get you familiar with Canadian credit monitoring, and how it can protect your financial life.
What is Credit Monitoring?
Credit monitoring is a service you subscribe to that alerts you of any changes on your credit report. It tracks your personal information, like your credit accounts, your address, your employment, etc., and informs you of any changes made to that information.
Credit monitoring was introduced to help fight the massive crime wave that’s sweeping the world – identity theft. Criminals steal your identity by gaining access to your personal information, and using it to make purchases in your name. Credit monitoring services track activity on your credit record, and let you know of all changes, so that you’ll know if somebody’s trying to steal your identity.
Is credit monitoring safe?
Most credit monitoring companies are reputable, and many are owned by publicly traded corporations. So the companies themselves are safe. As far as your information is concerned, all credit monitoring services use the latest secure technology, protecting all your personal data with specially designed software and encryption techniques.
Will signing up for credit monitoring affect my credit?
The first thing you’ll get when you sign up for credit monitoring services is a copy of your credit report. This is called a consumer pull, and it doesn’t affect your credit.
Your credit score is affected every time you apply for credit, because the more credit you apply for, the more debt-load you’re going to carry, and that means you’ll be a higher risk and you’ll have a harder time getting new credit.
Why do I have to give a credit monitoring service so much personal information?
Remember, the idea here is to protect your identity. In order to do that, the credit monitoring service needs to know for sure that it’s really you who’s applying for the service, and not someone trying to steal your personal information. So they ask you questions that only you would know the answers to.
And since there’s so much information that’s public these days, they have to dig deep to find something that specifically and positively identifies you.
What are file alerts?
File alerts are reports that are periodically sent to you by a credit monitoring service. How often you get these reports differs – some services offer weekly file alerts, some monthly. These file alerts include any changes made in your credit report that could have possibly been done by someone other than you. They include opening or closing of a credit account, a change in payment patterns, bankruptcies, judgments, credit searches, and any major changes in spending volume.
So you can see that credit monitoring definitely protects you by regularly sending you file alerts of activity that may have been instituted by an identity thief.
Can I get a free credit report in Canada?
A free credit report is the first thing you’ll get with your new credit monitoring service. Anyone can get a free credit report, if they meet certain criteria – it’s a U.S. federal law. You can get a free credit report if you’re out of work and looking for a job, if you’re on social assistance, or if you believe you’re a victim of identity theft. You can also get a free credit report if you’ve been denied credit. The CRA (credit reporting agency) which provided the information that resulted in your being denied credit must send you a copy of your credit report if you request it.
How much of my credit report do I have access to?
At first, credit monitoring services allowed only certain information to be seen by its subscribers. The information was released on a need-to-know basis.
Now, however, there are some credit monitoring services that allow you complete access to everything in your credit report – even information lenders can’t see. All you have to do is login to their site, and it’s all there.
What’s a credit score?
Your credit score is calculated using all the information in your credit report. There are specific methods of obtaining this score, the most popular of which is the FICO score. The information taken into consideration to calculate your FICO score is basically how much you owe and if you pay on time. Credit scores can run from 400-820. If your score is over 700, you’ll have no trouble getting credit. If you have a low score, it doesn’t necessarily disqualify you from obtaining credit, it just means you’ll pay a higher interest rate. Of course, if it’s really low, you’ll be denied.
Will I be notified if someone tries to open a credit account?
That’s the basic function of credit monitoring services – to alert you of any unusual activity or changes. However, it’s important for you to understand that if that credit account was at a store or merchant that dealt with only one particular CRA, like Experian, and your credit monitoring service deals with Equifax, then that transaction won’t go on your record at Equifax. It’ll only be recorded at Experian. You should be aware that there are 3 major CRAs – Equifax, Experian and Trans Union. Credit monitoring services don’t necessarily deal with all three. So check that out before you subscribe.
Where can I find the best credit monitoring service?
The most information about pretty well anything can be found on the Internet. There are many online credit monitoring services. Generally they offer the same services, although the time between reports, and the amount of information they release, can differ. And, of course, they’re all competing for your business by offering the best credit monitoring at the lowest credit monitoring price.
Credit monitoring is a very valuable service. If you look at the months of heartache and hassle people go through to get their lives back together after becoming victims of identity theft, then you’ll agree that credit monitoring is worthwhile. It takes an average of 18 months to straighten out the mess from identity theft, and it costs thousands of dollars, not to mention the constant phone calls from creditors, and the sleepless nights. The few dollars you pay every month for a credit monitoring service are definitely dollars well spent. So get online and find a credit monitoring service – and get a good night’s sleep!
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