In most cases, a more precise term for credit monitoring is credit report monitoring. To understand why, let’s back up a little bit. Each of the 3 major credit bureaus — TransUnion, Equifax and Experian — may produce reports for each consumer credit file it has. Whenever there’s a permitted request for someone’s credit information, the bureau will generate a report of that person’s credit file as it stands at the time of the request.
Credit monitoring services typically alert a customer anytime certain changes are noted to that customer’s credit file. These changes happen when a bureau receives new information reported by one or more of the consumer’s creditors.
Why would someone need credit monitoring? One reason is that information in a credit file may yield clues about suspicious, and possibly fraudulent, account activity. Credit monitoring may help you find out about such information sooner, rather than later. Credit monitoring may also help alert you to information inaccurately reported to one or more of the bureaus. Again, the sooner you find out about such changes, the sooner you can dispute them, if need be.