Protecting your credit health and identity with credit monitoring

Credit Health and Identity Protection through Credit Monitoring

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Credit Sesame discusses protecting your credit health and identity with credit monitoring.

Protecting your credit health and identity is extraordinarily important. A poor credit score could cost you thousands yearly in higher borrowing, insurance, and home rental costs. And bad credit can stop you from getting the job you need to get out of financial trouble.

Meanwhile, identity theft is a growing problem that affects 1.4 million Americans each year. It can ruin your credit and obsess your mind while trying to untangle your finances from the fraudsters’.

Credit monitoring can be an effective way of protecting your credit health and identity. It can alert you when a new account is opened in your name, allowing you to act quickly before the criminal can wreak too much damage. It lets you improve your score by telling you when you’re doing harmful or beneficial things yourself.

Why credit health is important

Harvard University Employees Credit Union explains to its members the value of a high credit score:

Having a low credit score comes at a double cost. It can be more difficult to access financial products (such as credit cards, home loans and car financing) if your credit is less than stellar, and usually, the products end up costing more.

How much poor credit can cost you — in dollars

That sounds bad enough. But Syracuse University reveals the difference between a poor and excellent credit score in more stark terms. It reckons that, compared to someone with excellent credit, those with poor credit could pay:

  • $48,425 more in interest on a private undergraduate student loan
  • $591 a year more for homeowners insurance
  • $1,374 a year more for car insurance
  • $1,006 more for a security deposit for each home rental
  • $9,320 more for each car loan
  • $4,975 more for each credit card

Meanwhile, the median home price was $467,700 in the last quarter of 2022. A calculator on the MyFICO website shows those with a 620-639 credit score would, on average, pay $727,387 mortgage interest on that home over 30 years. That compares with $548,822 for someone with a 760-850 score.

Wow! That’s a $178,565 saving ($5,952 annually or nearly $500 a month) just for an excellent credit score.

Poor credit could easily cost you hundreds of thousands of dollars over your entire life.

Poor credit and your career

Worse, Syracuse University says 47% of employers run credit checks on new hires. So, the job you were counting on to get your credit score higher could be denied to you.

To be clear, employers can no longer check employees’ and prospective employees’ credit scores.

But, with your permission, they can still pull your credit report. And that shows every credit-related slip-up you’ve made going back at least seven years.

Of course, you could withhold your permission. But how would you explain that at your interview?

The good news is that it’s never too late to improve your credit health. So, read on to discover how credit monitoring could help you push your score higher. But first, let’s explore the second part of our theme, “protecting your identity.”

Protecting your identity

In 2021, “the number of consumer identity theft complaints rose 3.3%, to just over 1.43 million,” according to Top 3 credit bureau Experian. But it’s been around for many years.

Indeed, in 2013, they even made a movie called Identity Thief. It was lighthearted fun, but that’s the opposite of the experiences of the millions of victims.

Once fraudsters have hijacked your identity, they can open new credit accounts in your name. And, of course, they won’t make payments, which can quickly see your credit score slide down into subprime territory. You might soon find it impossible to borrow.

The effect on your credit report will be equally devastating. And, as we just learned, that could bar you from switching employers. It might even stymie a promotion within the same company.

How to protect yourself from ID theft

The two most significant ways criminals steal your identity are data breaches and “phishing.” Phishing is when a fraudster calls, writes, texts or emails you claiming to be from a trusted company or organization. And you believe them enough to part with personal information — perhaps including your Social Security Number.

Or you may click on a link that downloads a virus onto your computer or smartphone. The phishing virus typically allows the thief to access all the personal data you keep on those, sometimes including your bank passwords.

Phishing protections

The Federal Trade Commission suggests ways to recognize phishing scams. Even if you receive an email or text that looks to be from a bank or company you use and trust, be highly suspicious if it:

  • Has a generic greeting rather than one that includes your name
  • Says your account is on hold because of a billing problem
  • Invites you to click on a link to update your payment details

In addition, you should install security software to protect your computer and phone. Make sure that the software and your operating system are set to update automatically. Whenever you’re offered the opportunity, opt for multi-factor authentication. That makes it much more difficult for a scammer to access your accounts.

Data breaches

It’s harder to protect yourself from data breaches. This is when a hacker gains access to an organization’s database that contains information about you. One of the worst examples of this (because it included Social Security Numbers) occurred in 2017. That’s when credit bureau Equifax lost control of information concerning 148 million people. There have been bigger hacks (Yahoo once had data compromised on 3 billion people), but those rarely included SSNs, something very useful to identity thieves.

Nowadays, an organization that suffers a data breach will generally let you know quickly. And it would be best if you immediately changed your password. But your best protection is credit monitoring. Because that quickly lets you know when an account’s opened in your name. And you can nip the identity theft in the bud.

Protecting your credit health with credit monitoring

Most people aren’t credit experts. They’re too busy living life. However, a good credit monitoring service can provide all the expertise you need.

Take Credit Sesame’s free credit score offering, for example. It refreshes your credit score daily, enabling you to track your score effectively in real-time. Imagine the power that gives you.

Better yet, it provides advice about your actions that are helping or harming your score. So, you can do more of the former and fewer of the latter.

And, as your score improves, it will suggest beneficial changes. For example, once your better score makes you eligible for a credit card with a lower interest rate than the one you have, it will tell you. And you can begin to save money quickly by applying for the plastic with a high probability of getting approved.

With such simple ways of protecting your credit health and identity, what’s stopping you from signing up for credit monitoring today?

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Your credit score made simple with Sesame Grade™

You can see your credit picture at a glance with Sesame Ring™. The unique user interface enables easy and intuitive review of TransUnion data. Credit report information from all three bureaus is available if you choose to upgrade to Premium. In addition to data and information, the app provides a measure of overall credit health with your Sesame Grade™, and provides alerts, personalized action plans and AI-driven customer support. As you embark on your journey of credit and financial health improvement, knowledge is your most potent asset. Insights from all three bureaus can help you make sound financial choices, negotiate from a position of strength, and nurture your credit health. Regular reviews enable you to maintain accuracy, detect discrepancies and shape your financial future with confidence. Remember that credit is a tool that, when used wisely, can open doors to financial opportunities.

Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

Peter Warden
Peter Warden has been writing for 14 years about personal finance, credit cards, mortgages and insurance. His work has appeared across a wide range of media, and he is an editor at The Mortgage Reports. He lives in a small town with his partner of 30 years.

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