What is Credit Monitoring & Why You Need to Check Your Credit Score
Nearly 4 in 10 Americans have no idea what factors influence their credit score or even what their credit score actually is. While you might not think that you need to know your credit score now, you could encounter numerous reasons down the road for needing to have a near-perfect credit score.
This is where credit monitoring comes into play. How will you be able to understand the ins and outs of your credit score if you can’t access it and keep track of the changes that occur as you pay off debt or take out more lines of credit?
But what is credit monitoring and how can you harness the power of these tools to help you improve your financial health? Here’s how to track your credit score and why it’s important in the first place.
What is Credit Monitoring?
Simply put, services such as Float track changes in your score to provide you with a comprehensive overview of your financial health. Some credit monitoring services will go even further, alerting you to potentially fraudulent activity or even guarding against identity theft.
How Does Credit Monitoring Work?
Credit monitoring services access your credit report from various different sources. As explained in our article about FICO scores, there are different sources and credit models that you can look at when determining your credit score. FICO is by far the most widely used, especially by larger lenders doling out larger loans.
Credit reporting agencies compile data to determine your credit score. The three credit reporting agencies are TransUnion, Equifax, and Experian. Then, companies like FICO offer different credit scoring models. Credit monitoring companies or apps like Float pull your information (with your permission) from one of these sources and monitor changes in your score over time.
Why is This Important?
A credit score is a number that lenders use to determine your creditworthiness. And, sometimes, you’ll even find that employers, landlords, and quite possibly your partner even need access to your score. And, monitoring your credit score is about more than simply watching that number go up or down.
Any good credit monitoring app will also provide you with a host of other helpful tools that aid in your financial journey. At Float, we provide you with helpful insight into why your credit score is what it is on top of allowing you to choose to share your score or credit range with others. We’ll also automatically update your score every two weeks to ensure you’re tracking only the most recent score.
Understanding your credit score provides you with a financial baseline of sorts. You can understand where you’re at and how you got there (late payments, high debt-to-income ratio, etc.) and then formulate a plan that will help you quickly improve your score so that you can reach your goals.
Is Credit Monitoring Free?
If you’re going to monitor your credit year-round, you can access free or paid credit monitoring services such as the Float app. You can pay for credit monitoring services, but that doesn’t always mean you’ll access superior services.
A free app like Float provides you with an updated credit score and information regarding the factors affecting your score. Plus, you’ll get access to other helpful tools such as a loan marketplace and the ability to easily share information with friends and family.
Ready to Start Your Credit Journey?
Understanding what credit monitoring is can help you learn how to incorporate it into your daily financial app. Chances are that you use an app to help you budget your income and expenses. So why not enlist the help of a credit app to help you stay on top of changes to your credit score?
Ready to start monitoring your score? Float makes it easy and safe. We never store your financial data. And we make it easy for you to choose who you share certain information with. Use the tools we give you to see what’s affecting your score and then make changes accordingly.
Download Float today to get started.