What Is Credit Monitoring

Credit monitoring is the process of keeping an eye on an individual’s credit history so as to detect suspicious activities, frauds and thefts, if any. Credit monitoring service is provided by banks and other agencies to detect fraudsters and identify thefts.

In the present financial scenario there is a growing frequency of credit thefts. Hence, when a credit card holder knows that there is some change in his credit account, even though he is unaware about the type and details of the change can quickly react to reinforce security.

Good credit monitoring services prevent this havoc by providing you time to time information about your credit profile like:

  • Third party credit use during retail shopping

  • New or late payments of card dues

  • Balance change alerts

  • Balance below the specified limit alerts

  • Open or closed account alerts

  • Updating about car, home and business loans, etc.

Steps of credit monitoring

The process of credit monitoring involves identification of suspicious activities by carefully analyzing:

  • Insurance statements: They are verified by reviewing the sum insured, its expiry date, time to time reminding about submission and renewal of policy and its updating in insurance registers.

  • Stock statements: Stock statements are verified for its registration, signature verification, date of receipt, penal charges and creditors for stock

  • Operations in a person’s account: This can be verified for minimum and maximum account balance, average utilization, credit summations, debit entries, return cheques and diversion of funds.

  • Balance confirmation: The frequency of balance confirmation helps to keep check on fraudulent activities.

  • Security inspection

  • Limit review and renewal

Credit monitoring tools

Credit monitoring can be done by various direct and indirect tools such as:

  • Auto alert: This tool tags the access point and reports any suspicious listing instantly on your desktop.

  • Fraud alert: This system is used by the banking sector to prevent frauds in the insurance section. It notifies the client immediately about the nature and amount of fraud involved. Thus, this mechanism forms a bridge between the bank and its clients to detect and minimize thefts.

Credit monitoring system

Credit monitoring system or CMS is a credit monitoring tool developed with the aim of assisting financial institutions and banks to manage and monitor performance of their loans in a mode that prevents these assets from turning into NPA or non-performing assets. This system provides early warnings and alerts the banks about potential defaulters.

The credit monitoring system works to classify assets as:

  1. Performing assets

  2. Nonperforming assets such as

  3. Substandard

  4. Doubtful

  5. Loss assets

This system calculates provisions by directly applying central bank regulations automatically. It monitors securities and collaterals by interfacing the real time market systems. It governs a complete control on credit portfolios by its follow up and inbuilt workflow features.

The credit monitoring system provides proactive security alerts about any account irregularities to the customers through text messages or mail. It also provides multi channel correspondence for both external and internal communications of the company. It also interfaces with core back end banking system to provide an effective asset monitoring mechanism.

CMS serves with its industry standard features to meet its asset security and management challenges of today’s financial scenario.

Importance of credit monitoring

Regular credit monitoring is important and advantageous in:

  • Providing your credit scores

  • Tracking your credit data changes and reminding you about any security breach

  • Identification of credit report errors

  • Monitoring of credit scores throughout the year to help you respond in a well-timed manner about any changes in the credit scores.

By continuous credit monitoring, one can take control his/her credit situation and simultaneously work on improving it. Getting continuous reminders about debts to be paid helps you to remain debt free all throughout the year. This will not only improves your credit ratings, but also helps you in attaining future credits at the lowest possible interest rates.

Credit monitoring helps you to identify any apprehensive activities concerned about various day to day areas such as:

  • New account creation under your identity

  • Use of your credit cards at certain improbable locations

  • Increase in the frequency of use of your credit cards

  • Negative information related to your account

  • Delinquencies, if any

  • Aberrant account activities

Electronic transactions are more prone to identity thefts by various ways such as:

  • Key loggers that records keystrokes while you enter your passwords or other sensitive information.

  • Phishing sites that tricks you to reveal your credit information by posing as legitimate sites

  • Electronic data snatchers that can reveal any credit information in its vicinity.

A three bureau credit access is advisable to successfully monitor credit history and account activities. Three credit reporting bureaus are available in the United States to successfully monitor credit ratings, Equifax, Trans Union and Experian.

One of the common theft identification services used is credit id monitoring. It monitors client’s credit from all the three available credit reporting agencies.

Credit monitoring companies usually offer subscriptions that warn clients of any potential frauds. Credit card companies place fraud alerts on already victimized accounts, however these alerts get removed after a certain time period that makes the account again vulnerable to thefts. Thus, credit monitoring services play a very crucial role in thorough monitoring of the accounts all the year round.

What does the credit monitoring services offer to their customers?

Various services offered by these companies are:

  • Monitoring credit reports from all three available credit reporting agencies: Equifax, Trans Union and Experian.

  • Daily, weekly, monthly and yearly credit report monitoring

  • Instant alerts on any variations in your credit reports

  • Credit card and personal account monitoring for possible changes, if any

  • Personal information removal from the online database

  • Identity recovering in case of stolen identities is provided by these companies

  • In case of any fraudulent activity on your credit reports, these companies assist in the dispute processes.

  • During identity thefts, credit monitory services also offer identity recovery insurance.

Give your credit accounts the required security by using the credit monitoring services!


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