Personal credit is incredibly important in today’s economic times. A credit report is an accumulation of all borrowing history including how well debts have been repaid. It may be impossible to obtain loans without a high enough credit score, or if loans are available, to get good interest rates on those transactions.

Why Keep Tabs on Credit Reports?

As many as 79% of credit reports have errors. Furthermore, 25% of credit reports have an error serious enough to prevent credit approvals. These errors along with the possibility of credit fraud and identity theft are excellent reasons to monitor credit.

• Check for Errors: The most obvious reason to monitor credit reports is to find and report errors.
• Identity Theft: Monitoring credit reports can indicate whether or not an individual’s personal information has been compromised resulting in identity theft.
• To Obtain Credit: It is of particular importance to monitor credit in the months leading up to a major financial transaction, such as applying for a home mortgage. That way, if credit isn’t up to par, the potential borrower has opportunity to repair problem areas.

How to Monitor Credit?

There are many reasons that a person should take charge of their finances and monitor their credit closely. A combination of the following tactics helps to protect against credit errors, identity theft, and increase the odds of getting credit in the future.

Free Credit Reports

It is federal law that each of the three major credit bureaus provide a free copy of an individual’s credit report each year upon request. Ideally, a person would not request all three of these credit reports at once. Rather, request one every four months to optimize the usefulness of this arrangement.


There are credit watchdogs who are more than happy to keep track of credit changes, but these services often come at a steep price. Also, these may not be effective services against identity theft. However, it is preferable to use a credit watchdog than to do nothing to monitor credit.

Pay Attention

The best way to protect credit is to be deliberate about it. For instance, make an effort to scan credit card bills and other finances for odd purchases on a weekly basis. Being attentive to one’s finances is the best credit protection.
A positive credit report is important for anyone who wishes to borrow money or obtain credit at reasonable interest rates. Unfortunately, credit reports are not foolproof and need to be monitored closely. Attentiveness and taking advantage of free annual credit reports are excellent ways to watch out for problems.