Monitoring your credit is necessary but time-consuming, the FACTA act made great efforts in ensuring that consumers have access to their credit reports for free once a year from each of the credit bureaus, and yes this is better than none, but it simply is not frequent enough to give consumers plenty of alert to take action against credit fraud and other types of identity theft.

Other financial experts recommend that you check your credit report twice a year, but ideally you should do it once every quarter. Especially if you’re actively using credit and if anyone other than you has access to your social security number, then the bottom line is you really need to be monitoring your credit as often as once each quarter.

Credit reports are updated once a quarter by the credit bureaus but updates can be recorded anytime especially if there’s a lot of  activity, like credit inquiries, new accounts, or negative entries.

Employing credit monitoring services in general means that you have your credit report monitored for you on a regular basis, and you get alerted via email, phone or letter about any changes to your credit history.

Credit Monitoring: The good and the bad

There are those who do not consider these services worthwhile and those who feel it is essential to your overall credit health. Yes you can monitor your own credit with some effort, and depending on how often you plan on doing it, you’ll need to request a copy of your credit report from each of the credit bureaus individually and pay each for the report.

Doing it yourself is less convenient and you get no alerts. For around $10 a month most credit monitoring services will include a number of benefits to include a service warranty and resolution assistance should anything happen. You won’t get any of these benefits by monitoring your own credit files.

If you can do without the additional benefits then for around $10 to $15 dollars you can get each of your reports each quarter and review your accounts. So it really is a matter of do you want to do the foot work yourself?

The risks of credit fraud and identity theft are always present. From phishing scams, to spyware and the lack of proper security implemented by companies that handle consumer personal information, the odds are against us. In 2009 there were over 400 security breaches reported to the FTC and in 2010 there are 17 so far. These breaches expose consumer information in volumes and each day more and more people are discovering that they’ve been victimized by an identity thief.

The number of threats consumers face today are astounding, what’s worse, once the scam takes place, the victim may not notice the theft until months later. So what can you do to ensure your personal information stays safe?

One of the first steps to get started is to monitor your credit report. Your personal credit files are kept by the 3 major credit bureaus in the US. The information they record include:

• The companies that granted you credit
• Third parties that have made credit inquiries about you
• Third parties that have reviewed your credit
• Payment and timeliness information (payment history)
• Past addresses for the last 10 years.
• Jobs you’ve held in the last 10 years

Guidelines for monitoring your credit:

Keeping track of your credit report and what appears on it regularly, will prove a huge benefit and a great way to stay ahead of identity thieves. Here are some guidelines to be most effective.

1. Check all 3 of your credit reports: You’ll find that there are significant gaps and differences in how your credit is seen by each of the major bureaus. A certain account might show in one but not the other, so it’s essential you compare information across all three reports.
2. Monitor your credit reports quarterly: You can check your credit free once a year, and although that’s better than nothing, it isn’t frequent enough to detect fraud and stop the damage. Checking your report once every quarter is the most ideal way to keep on top of what’s going on with your personal credit file and catch identity thieves and stop credit fraud before it becomes a bigger problem.
3. Look for suspicious activity: When reviewing your credit report you’ll notice and recognize accounts that are familiar to you, like your Visa card from Chase, or that car loan you’re still paying off. Your job is to take a close look at every single account reported on all 3 of your credit reports and find anything that looks suspicious or inconsistent when compared to your other reports. Look at inquiries made and find out who they are and why they’re inquiring about your when you have not recently applied for credit.

Keeping on top of it proactively and consistently is the most effective way to keep safe from credit fraud and other identity theft threats. However, it may seem a little inconvenient and time consuming, if this is you, consider credit monitoring services or full blown Identity Theft Protection services.

These automated systems will alert you automatically when changes to any of your credit reports occur, and depending on which service you sign up for, the coverage can be very sophisticated and certainly takes the burden of your hands.