Credit monitoring has become a necessary service because the crime of identity theft has escalated so much that even the government can see the need for its prevention. To remove some of the popularly perceived threat, in 2004 the US government passed the Fair and Accurate Credit Transactions Act (FACTA). Part of FACTA gives consumers the entitlement to obtain a free credit report annually, from the three credit reporting agencies.

By allowing consumers access to a free credit report it is hoped they will be encouraged to take responsibility to access them and assess what has been reported and by whom, raising awareness of identity theft in the process. It can obviously help knowing your credit report has accurate information should you ever need to dispute any incorrect entries but there is much more reason for monitoring your credit reports other than accuracy itself.

Why Monitor Your Credit Reports

Even if you monitor your credit report just for accuracy’s sake, that is a very good goal. Different studies have shown up to 70%-80% of most consumer credit reports to be inaccurate. That shocking statistic alone should shake you into action and drive you to finding our what exactly is contained in your credit report.

Believe it or not, your credit report actually controls a lot of your life. True. Of course, you were aware that creditors checked your report before lending you money, or sending your credit card to you, or granting you a mortgage. Did you know though, your insurance company very probably does a check of your credit report to help determine how much you’ll have to pay for your car and annual home insurance? Your employer too might give your credit report the once over before giving you that job or promotion.

What is imperative though, is to check that your portrayal, as presented by the credit report bearing your name, is correct. Who’s checking your credit, the credit you have already been given, and your payment history are all in your credit report. Identity thieves have usually stolen an identity for access to a financial personality so your credit report will be the first place where you ought to find any evidence of identity compromise.

>>>  Read Part 2 of Credit Monitoring and Identity Theft  >>>