How a Credit Monitoring Service Can Help You Save Money

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A major purchase like buying a house or a car can be daunting. Not only do you want to find the best solution for your needs and desires, but obtaining optimal financing for either transaction is a task in itself. An important factor in obtaining financing for these purchases is related to your current credit score.

It doesn’t matter if your credit is perfect or needs improvement, a credit monitoring service can give you real-time information to see the ups and downs of your credit score and alert you to any fraudulent activity.

To select covers the reasons why you should consider using a credit monitoring service if you are planning to buy a car or a house this year.

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Why You Should Use a Credit Monitoring Service Regularly If You’re Considering Buying a Car or Home

1. Better credit means lower interest rates and bigger savings

It’s no secret that a better credit score can help you qualify for better financing opportunities. And better financing means you’ll spend less on interest.

For example, the Federal Reserve reports that in November 2021, the average car loan was $35,284 with an interest rate of 4.5% and a repayment period of 67 months. This means the average consumer is paying $4,683 in interest over 5½ years, with almost no chance of the car appreciating, making it a very bad investment. However, if you lowered the interest rate to 3%, the total interest paid would drop to $3,081.

As for houses, that makes a more dramatic difference. In the third quarter of 2021, the average house price was $453,300 and the average interest rate during the same quarter was 2.87%. On a 30-year fixed rate mortgage, the total interest paid would be $234,707. If you have great credit and a solid down payment, a 2.5% interest rate would net you a total of $191,489 in interest over 30 years, a savings of over $43,000.

By using a credit monitoring service, you can quickly determine your credit score and find out what improvements you may need to make to get the best possible interest rates. However, this needs to be done well in advance of your purchase, and then as you make score improvements, you can shop around for the best rate.

2. Mistakes could hold you back

A third of Americans have errors on their credit report, according to a June 2021 Consumer Reports study.

These errors can be minor like addresses or phone numbers, or something even more serious where someone has impersonated you. And in many cases, these errors are not discovered until the purchase is in progress, and consumers are stuck with higher interest rates, or even worse, they are unable to obtain financing. .

If you find an error, it is important to report it immediately to the three major credit bureaus. the Federal Trade Commission published a step-by-step process on how to dispute errors, which involves contacting the offices and providing evidence of the nature of the error.

Since these offices handle an immense amount of information and complaints, this process can take months in some cases, so it’s best to do it well in advance of your major purchase to resolve any issues. Credit monitoring services can help detect fraud in advance or at the time: some services can even help you troubleshoot and/or offer identity theft insurance.

3. A little investment of time can save you big

I normally check my credit score once every two weeks and it takes me less than five minutes. I just check if my credit rating has gone up or down, why my credit rating has changed, and then I go on with my day. Normally, my credit score will change a few points based on paying off my student loan debt and paying off my credit card in full each month, but it’s important to be aware of any dramatic or unexpected changes.

And if you don’t want to check your credit score regularly, you can set up a credit monitoring service to alert you to any changes.

However you want to check your credit score, it should be part of your personal finance routine.

Best Credit Monitoring Services

There is a sufficient amount of credit monitoring services available from various companies, and many of them are free.

Here are some of our favorites that can be used for free:

Capital One CreditWise®

Information on CreditWise was independently collected by CNBC and was not reviewed or provided by the company prior to publication.

  • Cost

  • Credit bureaus monitored

  • Credit score model used

  • Dark web analysis

  • Identity insurance

Experian Dark Web Scan + Credit Monitoring

On Experian’s secure site

  • Cost

  • Credit bureaus monitored

  • Credit score model used

  • Dark web analysis

  • Identity insurance

If you want more robust features like tri-bureau credit monitoring, expanded fraud alerts, and identity theft insurance up to $1 million, consider these services:

IdentityForce® UltraSecure and UltraSecure+Credit

On the Identity Force secure site

  • Cost

    For a limited time, 40% off all plans – offer ends 6/12. UltraSecure+Credit Individual starts at $139.90/year and UltraSecure+Credit Family at $209/year. Click “Learn more” for more details.

  • Credit bureaus monitored

    Experian, Equifax and TransUnion

  • Credit score model used

  • Dark web analysis

  • Identity insurance

    Yes, $1 million for all plans

Conditions apply. To learn more about IdentityForce®, visit their website or call 855-979-1118.

Privacy Guard

Information about PrivacyGuard® plans was independently collected by CNBC and was not reviewed or provided by the company prior to publication.

  • Cost

    $9.99 to $24.99 per month

  • Credit bureaus monitored

    Experian, Equifax and TransUnion

  • Credit score model used

  • Dark web analysis

    Yes, for Identity and Total Protection plans

  • Identity insurance

    Yes, up to $1 million for Identity and Total Protection plans

At the end of the line

Maintaining and growing your credit score is like running a marathon, not a sprint. It’s not something you should only worry about when preparing to buy a house or a car. If you want qualifying for an apartment lease, applying for a new credit card, or even getting a new job, your credit score may be taken into account. So, whatever your future plans, your credit score is a fundamental part of your financial life, and without a strong credit score, you may find yourself with fewer options.

So if you’re buying a house or a car in 2022, improving your credit score could save you a lot of money in the short and long term. Consider using a credit monitoring service to help you keep tabs on your score and prepare for any major purchases ahead.

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.

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