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A credit report watch refers to engaging a credit report monitoring service. Such services are offered by the three major credit bureaus — Equifax, Experian and TransUnion — as well as by independent companies. A credit report watch means the service engaged by a consumer will monitor that consumer's credit report for changes such as the opening of new accounts or a drop in the credit score.
A person's credit score is determined by his borrowing behavior and his relationship with debt. A good credit score results from keeping credit utilization to around 30 percent of available credit, refraining from opening too many new cards or taking too many new loans, paying all debts and bills on time, and having a good mix of different types of credit available with a long credit history. Poor credit can result from late payments, maxing out credit cards, having a short credit history, or opening too many new accounts. A person's credit score is extremely important, as it plays a large role in determining whether that individual is eligible for loans and at what interest rate.
Many individuals wish to institute a credit report watch because of the importance of a credit score. In such cases, the individual will engage the services of an agency with access to his credit report. The individual will provide his Social Security number, full name, address, date of birth and other identifying information that the company will use to access his credit. The individual will also provide payment information to the firm he is engaging to conduct the credit report watch. Often, a monthly subscription fee is required by the agency or entity doing the credit report monitoring.
The company doing the monitoring will then alert the individual as to any changes or alterations in his credit he needs to be aware of. Not only can the information from a credit report watch help a person improve his credit score by understanding how his behavior affects it, but it can also help an individual catch identity theft early and prevent such identity theft from occurring. When a new account is opened in a person's name or using that person's Social Security number, the credit monitoring service sends him an alert. If he did not open the account and/or the account was opened fraudulently, he can immediately contact the creditor and take steps to correct the problem.