When it comes to credit monitoring services, there are a lot of options available - and they are not all created equal!
One of our readers, Stacey, sent us this question:
I am thinking of joining Identity Guard or something else to help monitor my accounts and to tell me what my score is. Is it worth it?
Thanks for your question Stacey!
Credit monitoring services are a valuable tool. They help you monitor your credit reports and keep them free from errors, help you prevent identity theft, and allow you to track your credit score. Whether or not they are worth the ongoing expense will depend on your situation.
Most credit monitoring services run about $15 a month and up depending on what you sign up for. Credit monitoring services charge extra for things like tracking your credit scores, and how many of the three credit bureaus you want to view reports and scores from. That said, there are certainly times that you will probably want to track your credit scores and reports no matter what:
If you are planning to purchase a house, or a car in the near future.
If you think you may be a victim of identity theft, or if you have had your identity stolen in the past.
If you plan to get a loan of any type soon.
If you are rebuilding or trying to raise your credit score.
If you have secured credit cards and need to know whether or not they report as secured cards, or report to all three credit bureaus.
It is important to understand that all three of the credit bureaus have their own system for computing your credit score, and that those scores are separate from your FICO score. Before you agree to pay monthly for a credit score, be sure that you are paying for the scores that you want to see. Credit card lenders will usually check your credit scores at one (or more) of the three credit bureaus. Anything bigger than that (house, car, bank loan) and they will most likely check your FICO score instead.
Some credit monitoring services will show you your FICO score, and some will not. Read those terms and conditions carefully.
As for which credit monitoring service I recommend:
In the past I have faithfully used TrueCredit, Transunion’s credit monitoring service. However recently I have switched to Id Patrol from Equifax, and I am much happier with it. Here’s the lowdown:
Transunion (True Credit):
Their pages are full of targeted advertising, and it can sometimes be difficult to locate the information you need.
They offer too many choices - for $15 a month I can either see just my Transunion credit score and Transunion credit report, or I can view only my credit reports at all three credit bureaus. If I want to view my credit scores at all three bureaus I have to upgrade.
By the time you add in all three credit bureau scores and reports, plus your FICO score, you can pay as much as $45 a month. Personally, I find that ridiculous.
Id Patrol (Equifax), on the other hand has some really neat perks:
They have far fewer advertisements.
Everything is well organized, and easy to understand.
$15 a month gets you your credit reports (not scores) from all three credit bureaus, and your debt-to-credit ratio is clearly spelled out for each.
They have several identity protection features, including a very nice identity theft insurance package at no extra charge.
The identity theft insurance pays for a wide range of expenses. It even includes paying for your time off work to get everything straightened out.
With all of those extras, plus the easy to read format, I switched to Id Patrol. I am very, very happy with it. I do recommend it for anyone who wants to monitor their credit, because they have more features in the same price point as all of the other credit monitoring services.
Thanks for your question!
Have a question for us? Leave a comment below!
Was this article helpful to you? You can get our future articles for free. (Click here)
I was wondering how asking my credit card company to increase my credit limit will affect my score. I would like to take advantage of a 0% promotion. thanks - km
Hi Kali, thanks for your question.
Getting a credit limit increase will not hurt your score. In fact, it may actually raise it because it will lower your debt-to-credit ratio. Your debt ratio is factored by weighing the amount of money you have already borrowed, against the amount of money it is possible for you to borrow. In otherwords, your credit limit vs. what you’ve charged. The goal is to keep the amount you have charged well under 30% of your available credit.
So, if you raise the amount of money it is possible for you to borrow (by asking to have your credit limit raised) without going out and spending more money on credit, then your score will go up.
Now this holds true for existing accounts where you just call and ask for the limit to be raised, or where your credit card company raises your limit for you automatically. However, if you are responding to a new offer, like a balance transfer, or a completely new card, then you can expect your credit score to take a small hit because they will have to pull your credit score to approve you for the new account.
The key thing to understand is that new accounts only represent ten percent of your FICO score, while the debt to credit ratio represents 30 percent of your FICO score. That means that going ahead and getting that credit limit increase will help you more than it will hurt you.
Thanks again for your question!
Have a question for us? Leave a comment below!
You can get our newest articles for free! Click here.
This offer is available on new Chevron and Texaco Visa Card Accounts and Credit Card accounts approved between August 1, 2008 and September 30, 2008.
Promotional credit offer of $.30 per gallon is good for 60 days from the date the application is approved—on up to 200 gallons per billing month. Credits will automatically appear on the cardholder’s monthly statement. Offer is valid at all Chevron and Texaco branded retail stations.
A maximum of $300 in total Fuel Credits may be accrued and redeemed in any calendar year.
What we think:
Now, this is not a bad card, and the offers certainly look tempting enough - until they expire. But if you really want to maximize your rewards consider the alternatives:
The Discover Open Road Card- You get a 5% rebate on gas and auto maintenance purchases, and you can buy your gas anywhere you want to. You also have the option to double your cash rebate by taking it in gift certificates from participating merchants. To read more about this card you can click here.
The Chase BP Visa Card - 5% rebate on purchases at BP Amoco, 2% rebate on dining and travel purchases. No Annual Fee. You can read more about this card and it’s benefits when you click here.
All in all the Chevron and Texaco Rewards Visa has a nice initial package, but there are better reward cards out there.
Have a question for us? Leave a comment below!
Want to get our future articles for free? Click here
I got up this morning and had a notice in my mailbox from my True Credit monitoring service:
Dear Jenna,
Per recent regulations, credit bureaus are now required to report any account as “included in bankruptcy” if they have a status of discharged in existing public records of a Chapter 7 Bankruptcy. Previously, only creditors were required to report this information.
If you have a credit card, loan or collection account that was never reported as “included in bankruptcy” and was discharged through Chapter 7 Bankruptcy, a credit alert may be sent updating it to “included in bankruptcy.” Due to the age of these records, they may not trigger an alert. However, you should be aware that any possible alert would not indicate recent activity on that account.
You may experience a slight change in your credit score if any of your accounts are updated due to a bankruptcy. The more recent the bankruptcy, the more of an impact it might make on your credit score. Any update would be made by September 1, 2008.
Sincerely,
TrueCredit
So, what does this mean to you? Well, if you have ever declared bankruptcy, then it means a lot.
After my bankruptcy I still had several collection accounts, particularly the ones from GLA (a medical collections company) that continued reporting my debt to all three credit bureaus - even though it had been included in my bankruptcy. My credit score took a huge hit from the bankruptcy, and an even bigger hit when they continued to report the negative collection accounts.
Before this change, it was up to your creditors to adjust their own accounts, and report them to the credit bureaus as being included in your bankruptcy. This would have created a lot of footwork for either you or your lawyer (it did for mine) when you declared bankruptcy because they had to contact everyone you owed, and then hope that they corrected it in their own records.
Now however, you do have a different option. You still need to have your lawyer contact your creditors, but after your bankruptcy goes through you actually have a leg to stand on if these creditors continue to report your accounts as open.
Create free accounts with all three of the credit bureaus (Transunion, Equifax and Experian) and make sure you challenge anything that is still reporting incorrectly. They will update your account (I’m sure it could take up to a month) and it will raise your score.
If you have declared bankruptcy, or are thinking of declaring bankruptcy, then you need to know that just declaring bankruptcy will not always take care of your debt as far as your credit reports are concerned - you have to do that on your own. Yes, it’s trouble, but the upside is that it will raise your score and you will be on your way to recovering from that bankruptcy almost immediately.
Good morning everyone! We had a couple of quick reader questions I wanted to share with you today.
One of our readers, Brian, sent us this question:
Can one person transfer a balance to another person’s card? Allow me to elaborate.
I have two cards in my name. One was obtained 6 months ago to use the 0% balance transfer feature. My fiance has no cards yet and would like to start building some credit as her score is not stellar. Would it be possible for her to get her own card with a balance transfer deal and transfer a balance from one of my cards? Or can someone transfer only between cards with one name on it?
Thanks for your advice on this topic.
Thanks for your question Brian!
The short answer is no, you cannot do a balance transfer from one person to another, just from one account to another account with the same person’s name on it. It is excellent that your fiancée wants to improve her credit. My recommendation to her is this:
Start with a couple of secured credit card accounts. I highly recommend the Orchard Bank Secured Credit Card. In my opinion, it is the best of the secured credit card accounts out there. You can find out more about secured credit cards by checking out our detailed page that discusses the rates and terms for the available secured credit card accounts.
Just in case you’re thinking “A secured credit card?? Why would she want to get one of those? You can read our recent article on the subject here. They really are the very best way to rebuild your credit.
Also, I would recommend that you add her as an authorized user on your credit card accounts. FICO has just released a statement saying that they will now factor “authorized user” accounts into your credit score.
Just be sure to keep your own balances under 30% of the total amount you can borrow, and make your payments on time. Otherwise you will not be doing her any favors. If you are carrying a zero balance on the card you just transferred the balance from, then it would be best to put her on that account and not charge anything on it.
Thanks again for your question, and good luck to you both as you build your future together!
A double feature!
We also had another reader, Sherri, who wondered:
Can you use a credit card to purchase a house?
I don’t see why not, if you had an available limit that high. That would be rare though, even if you were looking at purchasing a foreclosed home. Also, charging that much money to one account (or several) in a single month would lower your credit score because you would almost certainly be over the recommended 30% of your available balance. It would be a bear to try to pay off as well!
Interesting question! Thanks for taking the time to ask.
Have a question for us? Leave a comment below!
You can get our future articles for free when you click here.
If you are in the process of repairing your credit, then getting a secured credit card is an excellent option.
In the past, secured credit cards were viewed warily by lenders; they were a mark of mis-managing your debt. Today though, secured credit cards do not really have the same stigma attached to them, and in some cases they can be a very positive sign that you are taking steps to re-build your credit after a disaster.
You are an excellent candidate for a secured credit card if you have ever been through any of the following:
Bankruptcy
Judgments
Credit Card, Loan, or Debt Charge-offs
Frequent Late Credit Card or Loan Payments
Unpaid Medical Bills
There are more reasons than ever before to take secured credit cards seriously. Here are just a few of the many reasons you will want to start with a secured credit card while you re-build your credit:
Secured Credit Cards have lower interest rates than bad credit, unsecured credit cards:
Yes, you can probably still qualify for an unsecured credit card of some sort, even with a bankruptcy. However, most cards that cater to people with low credit scores have high fees. It is not unusual to see a $250 application fee, and a $100 yearly fee coupled with a 20% (or higher!) interest rate on an unsecured, bad-credit credit card.
Secured credit cards, on the other hand, require $200 - $300 dollars to open, and you will eventually get that money back. They also usually have interest rates under 10%, and low, or no yearly fees.
Many secured credit cards do not report as “secured credit cards” on your monthly credit bureau reports. This means, that to a lender, those secured credit cards are exactly the same as having unsecured credit cards.
With a secured credit card, you can raise the credit limit any time you want to by depositing more money:
Now, this is huge. With most credit cards (especially if you have bad credit) getting a credit limit increase is like pulling teeth.
Thirty percent of your credit score depends on your debt-to-credit ratio. This means that if you ever charge more than 25% - 30% of your total available balance, your credit score will drop.
So, what happens if you want to put your monthly bills on your credit card to make things easier? Well, with an unsecured credit card, you would be out of luck. With a secured credit card however, you can total up the amount you want to charge each month, and figure out how much you need to increase your limit so that you stay under that 25% rule.
Secured Credit Cards act as a failsafe:
If you lose your job, or have trouble paying your bills, and cannot pay down your credit card, then you can use the money you have in your secured savings account to pay the balance on the card.
You will never again have to worry about defaulting on a credit card because the amount you borrow has been previously set aside. That is real peace of mind – especially if you have defaulted on a credit card before and experienced a number of collection calls.
Banks that issue secured credit cards are more likely to issue you unsecured limit increases, or an unsecured credit card after a couple of years:
If you have an excellent payment history with your issuing bank, wait a year or two, and see if they will issue you an unsecured credit card in place of your old secured one. You will then get your deposit back, and depending on the issuing bank, you may even be paid a small amount of interest on your original deposit.
All in all, secured credit cards are one of the best deals out there for people who are working to re-build their credit. With so many things in their favor, they really are the best place to start out.
Secured credit cards are also an excellent tool for people with no established credit history, or anyone who needs to be able to regularly increase the limit on their credit cards.
To find out more about which secured credit cards are available, and what their terms and interest rates are, please visit our secured credit card pages.
Have a question for us? Leave a comment below!
Get our future articles on rebuilding your credit for free - click here.
I am 36 make 100K and have no credit cards or savings. I am married with 4 kids 9-15. I have a mortgage (30year fixed 6.125%) I owe about 79K, payment is $800, 2 new cars with $359 5% (26K balance 5 years left) + $589 0% (28K balance 4 years left). Boat payment $150 6% ($6500 balance with 6 years left)
My score is last I saw just under 700.
How many credit cards should I get to boost my credit score? Should I try to get credit cards with the highest limit? If I do not use the credit cards will they still increase my credit score.
I have always been against using money I did not have, but apparently this is not good for your credit score.
Quote from above
“If you give your accounts time to age, get your total debt to under 10 percent of your available credit”
Does this only refer to credit cards? If I open available line of credit at the bank but do not use it would this also boost my available credit? Do mortgage and auto/boat loan balances get considered as available credit? Or do the count as debt so it equals out? Should I open 2 credit cards, 1 or 3?
Please advise as to how I can boost my credit/FICO score?
Hi Matt, thanks for your question!
Let me pull your questions out and answer them one at a time:
> I have always been against using money I did not have, but apparently this is not good for your credit score.
I totally agree with you there! The truth is the most responsible use of credit is to have plenty of available credit, but not use it.
Having the available lines of credit can act as an additional safety net for your family in a time of need, and as long as you do not use the cards or charge them above 20%-30%, then your score will continue to go up. Just make your payments on time, and keep your balances low.
> How many credit cards should I get to boost my credit score? Should I try to get credit cards with the highest limit? If I do not use the credit cards will they still increase my credit score.
I would try to get two or three rewards credit cards, or at the very least, a couple of low-fee credit cards. Having the cards and not using them will still increase your score.
Open each new account up about 6 months apart to minimize the inquiry damage to your credit score. 2-3 credit accounts is plenty. Do not get cards with no pre-set limit. Some of them report the amount you charge as being the limit, which will not help you raise your score. Just stick to regular Visa or MasterCard accounts.
>If I open available line of credit at the bank but do not use it would this also boost my available credit?
Yes, it will. You can also consider taking out a loan, putting the loan amount in a savings account, and then just using it to repay the loan. You will have to pay the interest on the loan, but the timely payments will raise your score as well.
> Do mortgage and auto/boat loan balances get considered as available credit? Or do the count as debt so it equals out?
It’s pretty much just like a credit card. As far as your credit report is concerned, you borrowed X amount of dollars, and you still owe X amount. The debt-to-credit ratio makes up 30% of your credit score. The end goal is to get the entire amount you owe on everything under 30 percent.
The total financial picture:
You have nice interest rates on your current loans, and you obviously make payments on time. The only part that bothered me was this sentence:
I am 36 make 100K and have no credit cards or savings.
Ok. So, let’s take a look at that. You make 100k a year. You currently owe $139,500 on all your accounts. My very frank advice to you is this: Open a single credit account and then work towards having at least 10k split between a high interest savings account, and an investment account. (Not a retirement account).
Make sure that you are carrying enough life insurance too. You need to have at least $150,000 worth of insurance to pay all of your debts and cover burial expenses. Term life is cheap, and readily available without a physical.
I would go ahead and get one credit card now. Then, wait six months to open up the other new account. Once you have your emergency fund set up, and your insurance in place, consider getting one more; say a low interest, low fee Visa, or maybe a rewards MasterCard. You can get the details on those here.
Three accounts is the most you should really need, and you may not need that many. Check your FICO score periodically to see how well it is going up before you even open up a third account.
The reason I recommend doing things this way is because together your savings fund and your credit cards will be a powerful shield for you and your family in a time of need. Right now, if you were to lose your job, or something were to happen, you would not be able to make your payments.
Having even $5,000 in savings would give you time to find another job, or pay unexpected medical bills. Having your credit cards as a backup to your emergency fund will give you and your family real security no matter what happens. Remember that you do not have to use your cards to raise your score, you just have to have the open accounts.
Last year the Fair Isaac Corporation announced that they would no longer include “authorized user” accounts in the formula that makes up our credit scores. This was bad news for a lot of people because piggybacking (using someone else’s good credit to increase your own) was a prime credit re-building strategy. Apparently though, FICO has reconsidered.
Fair Isaac regularly updates the FICO scoring model in a rigorous process called model redevelopment. On June 5, 2007, Fair Isaac announced that with our next model update which we called FICO 08, authorized user accounts would no longer be included in the calculation of the scores. Fair Isaac was trying to protect lenders and consumers from a new type of credit repair practice known as “piggybacking” or “tradeline renting”, which has received national attention from news media since March 2007.
Piggybacking is an attempt to artificially inflate consumers’ FICO scores and deliberately misrepresent consumers’ credit history to potential lenders, by paying consumers with good FICO scores to add strangers with poor FICO scores to their credit card accounts as authorized users.
After consulting with the Federal Reserve Board and the Federal Trade Commission earlier this year, Fair Isaac has decided to include consideration of authorized user tradelines present on the credit report in the FICO 08 model. Our scientists have devised a method to consider these tradelines while materially reducing the negative impact that could arise from piggybacking.
Apparently there was a whole new industry practice going on where brokers were matching people with low FICO scores to people with high FICO scores. The person with the low FICO score would pay a set amount of money to be listed as an authorized user on the accounts of a stranger with a good FICO score for a set amount of time.
FICO did not announce how they plan to combat this practice if and when it happens again.
Underhanded scheming aside, this is great news for anyone who is legitimately trying to raise their credit score – especially for married couples where one spouse has a high credit score and the other does not.
If you have friends or family who are willing to help you raise your credit score, this is an excellent way to do it. Authorized users are not responsible for paying back any charges on the credit account, but the whole history of the authorized credit account still gets reported on their credit score.
A word to the wise:
If you plan to use this tactic to increase your credit score, you need to be very, very, sure that the owner of the credit account pays their bills on time. Otherwise, their late or over-the-limit transactions will show up on your credit report and lower your score. Remember that as an authorized user you essentially have no say over how the account is managed, so even if something is not your fault it could still lower your score.
FICO also has not said how much effect the piggybacked accounts will actually have on your score. There is no word yet on whether those types of accounts will have the same impact that a regular credit account has, or if they will factor in to a lesser degree.
Have a question for us? Leave a comment below!
You can get our future articles for free when you click here.
One of our readers, NoJobNow, sent us this question:
I was recently laid off and have paid off all my credit cards & collection accounts to clean my credit.
The only open accounts I have are 06′ Visa $1000 limit that is with my credit union, 07′ Target w/$200 limit (both w/no annual/monthly fees & low interest rates), and a 07′ $21K auto loan.
I closed an 06′ Merrick Bank acct that had $1150 limit w/$4 monthly fee, 06′ HSBC w/$300 limit and 02′ Capital One w/$600 limit-Low limits but high rates!
Now I’m seeing all these articles about closing accts will drop my score and am afraid because I was trying to get my credit right and not be in serious debt w/o a job!
I’m planning on a career change and will be applying for a student loan soon. Should I go back and re-open these accts or am I screwed in attaining a decent credit score and/or interest rate on my student loan? Please advice! Your help is greatly appreciated. Thank you in advance.
Thanks for your question!
The truth is, since you have already closed out your accounts the damage is done, and your score has dropped some. Re-opening the accounts is probably not a good strategy either. I say this because:
Most credit card companies will want you to fill out a new application rather than re-opening your old account. This will result in an inquiry on your credit report which will lower your score.
If you end up opening a new account rather than re-opening your old account then the average age of your accounts will drop even further – lowering your score.
It never hurts to ask your credit card company about it though. Just because most of them do not re-open accounts does not mean that every company operates that way. The only one of your old accounts that would really be worth trying to re-open would be your old Merrick credit card because it had the highest limit.
The best thing that you can do for your credit score right now is to not carry a balance on any of your cards. Go ahead and pull your credit score before you apply for your student loan – that way you know where you stand going into the borrowing process.
After you get your student loan you may want to wait several months and run your credit score again. If your score is high enough for you to get a decent offer of credit (low interest rate, low yearly fee, etc.) then go ahead and open up one more credit account . Do not use it though, just stick it back for emergencies. Having three good accounts with no revolving balances will repair your credit pretty quickly.
When you go to apply for that third card, keep this in mind:
Do not get a card with no pre-set limit – They will often report the amount you charge each month as the limit on the card, so that does not help your debt – to – credit ratio at all.
Get a card with a major lender (not your credit union) – Try HSBC Bank, Citi, or Chase. This will give you a better mix of credit and will boost your score a little.
Having a “Good Mix of Credit” is basically ten percent of your FICO score - so what does that mean exactly?
Contrary to popular belief, it does not mean that you should have an Amex, Visa, MasterCard, and Discover Card. Instead it means that you should have different types of credit lines open to improve your credit score.
For example, a good mix of credit would include:
A mortgage
A car loan
A couple of major credit cards like Amex or Visa
And one or two department store or gas credit cards.
Now, if you don’t have all of these loans, it does not necessarily mean that you need to immediately run out and get them to raise your credit score. Remember, the types of loans you have only make up ten percent of your score overall.
This is where your credit score vs. your financial sense has to come into play. Yes - it might raise your credit score for you to go out and get an auto loan. BUT, if you can afford to buy a used car outright, then it makes more sense financially to buy the car without an installment plan, and avoid paying interest on the loan.
Keep in mind that opening new credit accounts temporarily lowers your score. If you do decide that you want to open a couple new cards to improve your credit mix, them make sure you only open one account every 4-6 months or so. That will give your score time to recover before each new account.
The most important factor in your credit score in undeniably carrying a low (or zero balance) and making on-time payments. Having a good mix of credit is like the icing on the cake - not the foundation of your score.
When it comes to credit monitoring services, there are a lot of options available - and they are not all created equal! 
One of our readers, Kali, sent us this question:
Good Morning Everyone!
If you are in the process of repairing your credit, then getting a secured credit card is an excellent option.