Since any new information on your credit report can affect your credit score and your ability to get credit, monitoring your credit for any changes or inaccuracies is very important. Correcting incorrect negative information on your credit report can significantly raise your credit score and save you thousands of dollars a year.
Credit monitoring is even more important for preventing identity theft. Most identity thieves will attempt to open new accounts in your name. This will always result in a “hard inquiry” to at least one of the credit bureaus. Credit monitoring services alert you within 24 hours of any change to your credit report, including credit inquiries. Thus if an identity thief is attempting to open an account in your name, you would see an inquiry or perhaps several inquiries from lenders you are not requesting credit from. You can then follow up with the lender or with your credit monitoring service to stop the identity theft before any damage is done.