credit health checkup

What is Credit Health?

One of the major components of a successful annual financial health check is to make sure we review our credit report for accuracy. The status quo is to check it annually from one of the three main consumer credit bureaus.

I do not follow the status quo. Why? Identity theft is out of control and I do not see that being curbed anytime soon.  Three years ago, the Equifax hack exposed the personal information of 150 million people. I was one of those people.

As soon as I located my name on the list, I panicked, then I pulled my credit report. No suspicious activity was found on my report, at that time, but that didn’t change the fact that someone had my personal information and could use it at any given moment. 

In today’s tech forward-thinking world, data has become a valuable commodity. We need to take a proactive approach to protect it.

How Often Are We Allowed to Check Our Credit Report?

credit report

The misconception appears to be that we are allowed to get a credit report one time per year. Just one. No. The suggestion from experts is that we should check it once per year but we are allowed a free credit report once a year from each of the three credit bureaus.

That means that we are allowed to pull one report each from Equifax, TransUnion, and Experian. 

Here’s a tip: every year like clockwork, I pull my credit report on January 1st, May 1st, and September 1st. I find it easier to remember if I do so once per quarter. It doesn’t matter which credit bureau you go with first just pick an easy-to-remember order.

I choose this method to increase the frequency of checking my report. Besides, It’s free.

After I pull it, I review it. If it contains errors, then contest it with the credit bureau. If they do not resolve your inquiry within 30 days, the erroneous information must be deleted from your file.

Credit Security Freeze

Another tip: when it comes to monitoring credit health, we have the option to place a security freeze on our credit file. We are allowed to freeze our credit file with any of the three credit reporting bureaus online for free.

I have one on my TransUnion account. I elect to do so because it adds an extra layer of protection on my credit file.

If an identity thief attempts to open credit in my name, the creditor would not be able to retrieve a copy of my credit file.  No copy means no new credit.

It’s a simple process. All one has to do is sign up for an account and click lock my account.  That’s it.

The freeze works for me right now because I do not plan on opening any new credit accounts. If I choose to do so in the future, I would lift the security freeze. To do so, I would go to my account and hit unlock my account. Then once I secure the new credit, I would turn back on the freeze.

Please keep in mind that a security freeze does not prevent us from getting a free copy of our credit report and it does not affect our credit score. Its only function is to lock down our credit report. When we choose to lock/unlock is our choice. We are in the driver’s seat.

Credit Monitoring Services

credit monitoring.

Monitors our credit 24/7 and alerts to potential fraud. There are two options when it comes to credit monitoring services: free or paid.

I elect to go with the free version because I feel as though I have a good grasp on monitoring my credit report.

My credit card company offers the service for free. It’s updated once a week. I receive dark web alerts, fraud alerts, and updated balance information. Make sure to check to see which credit bureau your credit company uses to pull the data.  With the freebies, it usually pulls just one of the main three credit bureaus.

When I check this feature, it mentions that a security freeze is on file. Good, this tells me the action I took to place a freeze on my account works properly.

You may also elect to go with the free credit monitoring offered by the three credit bureaus. I use TransUnion’s True Identify. The information is a carbon copy I receive via my credit card but the added bonus is the ability to place a security freeze on my account.

Paid Version

If you elect to pay for credit monitoring services, here is a list of the best ones, per CNBC.  The biggest difference appears to be the paid version offers identity theft insurance.

Which on second thought, I should check to see if my credit card offers any perks. A lot of time we don’t read the fine print. Those credit cards come with extra perks such as travel insurance and car rental insurance.

Here’s how LifeLock, one of the leading credit monitoring bureaus defines identity theft insurance:

designed to cover some of the costs related to identity theft. It reimburses victims for money spent on reclaiming their financial identities and repairing their credit reports. Those costs can range from phone bills to legal help. Policies often provide specialists who can help guide victims through the identity restoration process.

The bottom line…

When it comes to preventing identity theft, nothing is 100% foolproof.  Whether we elect to do it ourselves or pay a company to do it, the key is to take action at the first sign of any unusual activity on our credit report.

Keeping an eye on our credit health is a good money habit to have.

Thanks for reading.

BGMD Editorial Team

Teigh Reed is the Content Editor for BGMD. I have a passion for all things finance-related. I'm on a mission to pay forward my knowledge of money and to cheer on your accomplishments. What's on your money mind? I'm listening.

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