September 28, 2022

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How A Credit Monitoring Service Can Help You Save Money

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A large purchase like buying a home or car can be daunting. Not only do you want to find the best fit for your needs and wants, but securing optimal financing for either transaction is a task in of itself. A huge factor in securing financing for these purchases has to do with where your credit score currently sits.

Regardless of 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 of any fraudulent activity.

Select covers the reasons why you should consider using a credit monitoring service if you’re planning on buying a car or home this year.

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Why you should use a credit monitoring service regularly if you’re planning a car or home purchase

1. Better credit means lower interest rates, and bigger savings

It’s not a secret that having a better credit score can help you qualify for better financing opportunities. And better financing means you will spend less on interest.

For example, the Federal Reserve reports that in Nov. 2021, the average car loan was $35,284 with a 4.5% interest rate and repayment period of 67 months. This means the average consumer is paying $4,683 in interest over 5 and a half years, along with nearly no chance for the car to appreciate in value, making it a pretty bad investment. However, if you lowered the interest rate to 3%, the total interest paid would fall to $3,081.

As for homes, it makes a more dramatic difference. In Q3 2021, the average home price was $453,300, and the average interest rate across the same quarter was 2.87%. On a 30-year-fixed-rate mortgage, the total interest paid would be $234,707. If you have excellent credit and have a solid down payment, a 2.5% interest rate would give 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 interest rates possible. However, this needs to be done far in advance of your purchase, and then as you make improvements to score, you can shop around to get the best rate.

2. Mistakes might be holding you back

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

These mistakes can be minor like addresses or phone numbers, or something even more serious where someone has stolen your identity. And in many cases, these errors aren’t discovered until the purchase is in process, and consumers are stuck with higher interest rates, or even worse, they’re unable to secure financing.

If you find an error, it’s important to report these immediately to the three major credit bureaus. The Federal Trade Commission has published a step-by-step process on how to dispute the errors, which includes contacting the bureaus and providing evidence as to what the error is.

Because these bureaus handle an immense amount of information and claims, this process can take months in some cases, so it’s best to do this far ahead of your major purchase to clear up any issues. Credit monitoring services can help spot fraud in advance or in the moment: Some services can even help you remedy issues and/or offer identity theft insurance.

3. A small time investment can save you big

I normally check my credit score once every two weeks, and it takes me less than five minutes. I simply check to see if my credit score has gone up or down, why my credit score has shifted and then go about my day. Normally, my credit score will shift by a few points based on debt repayment for my student loans and paying my credit card in full each month, but it’s important to be aware of any dramatic or unanticipated changes.

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

Regardless of how you want to check your credit score, it should become a part of your personal finance routine.

Best credit monitoring services

CreditWise® from Capital One

Information about CreditWise has been collected independently by CNBC and has not been reviewed or provided by the company prior to publication.

  • Cost

  • Credit bureaus monitored

  • Credit scoring model used

  • Dark web scan

  • Identity insurance

Experian Dark Web Scan + Credit Monitoring

On Experian’s secure site

  • Cost

  • Credit bureaus monitored

  • Credit scoring model used

  • Dark web scan

  • Identity insurance

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

IdentityForce® UltraSecure and UltraSecure+Credit

On Identity Force’s secure site

  • Cost

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

  • Credit bureaus monitored

    Experian, Equifax and TransUnion

  • Credit scoring model used

  • Dark web scan

  • Identity insurance

    Yes, $1 million for all plans

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

PrivacyGuard

Information about the PrivacyGuard® plans have been collected independently by CNBC and has not been 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 scoring model used

  • Dark web scan

    Yes, for Identity and Total Protection plans

  • Identity insurance

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

Bottom line

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.