The use of credit is so ingrained in American culture and society that credit cards have become the ultimate status symbol. More than that, credit gives consumers the financial liberty to purchase almost anything and enjoy the benefits immediately. Because of this system, the U.S. economy has grown to enormous heights.
In order to fully track credit spending and other relevant financial information, the federal government has authorized the creation of credit reports. Also known as consumer reports, these records contain important data about an individual's financial activities, credit purchases, and the creditors and lenders' take on the consumer. Because credit reports can be easily accessed by just about anyone from the credit industry, there is a high risk for security breaches.
Most cardholders often discover irregularities in their credit records from these reports. Charges previously gone unnoticed in monthly card statements can sometimes be reflected in the consumer's credit records. In most cases, cardholders find out instances of credit card fraud and identity theft by poring over their credit reports. However, consumers are entitled to receive free copies of their records once every year from each of the three authorized credit bureaus. Three free reports each year is obviously not enough for consumers to monitor how their records are being used.
Fortunately, some companies offer specialized monitoring services for cardholders who want to keep tabs on their reports. While not exactly cheap, these monitoring services allows consumers to access their own records anytime they want. Cardholders can also know who has access to their reports. Consumers can also be warned of any attempts to steal important information from their records.
Most identity thieves and credit card fraudsters try to open new accounts from the personal data and financial records of cardholders. Because credit reports contain all these information in a single inventory, they are prime targets for scam artists. Credit report monitoring gives consumers the freedom to keep track of their records and direct the credit bureaus to investigate any suspicious activities.
Credit report monitoring also allows cardholders to see any possible errors in their records. Research indicates that an estimated 40 percent of all credit reports contain mistakes of one form or another. While most are innocent clerical mistakes, some errors can severely affect the chances of a consumer to avail of financial services. With credit report monitoring, cardholders can see when and where the mistakes happen, giving them the opportunity to contact the credit agencies and have the problem fixed before their ratings are affected.