Credit monitoring services track your credit file every day and alert you whenever there is a change. Occasionally, they will also tell you your most recent credit score. Credit monitoring services offer two primary benefits.

The first (and most important) benefit offered by credit-monitoring services is that they help you prevent identity theft. Identity thieves operate by opening credit accounts under other people’s names. Identity theft occurs when someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes.

When an identity thief tries to open a new credit account under your name, a credit inquiry will be posted to at least one of the three main credit bureaus. Credit monitoring services alert you within 24 hours of any change to your credit report, including these credit inquiries. The sooner you can be told about the potential identity theft transaction, the faster you can follow up with your credit monitoring service provider or the lending company to stop the identity theft before any actual damage is done to your credit. It can be very difficult to prove that your identity was stolen, and if you can’t prove it, then you will be responsible for paying off the loan even though you didn’t use any of the money. The results of this can be devastating to your credit, as well as your personal income.

The secondary benefit of credit monitoring services is that they stay on top of your credit score. This means that you will always know your credit standing, which is important if you want to apply for a new credit card, loan, or other credit account.

If you are convinced that a credit monitoring service sounds a good idea, take a look at our recommendations in regards to which credit monitoring service you should choose. Otherwise you should look at some of the steps you can take on your own in order to improve the level of your identity theft protection.