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The average cost of monitoring all three credit reports and scores is $30 a month. ($360 a year). Now, with a hefty yearly cost like that, I have to wonder, are these companies really providing a service that valuable? Do I really need to know my credit score every month?

The reply to that is going to depend on your goals and your credit history. This is an excellent example of how past mistakes on your credit report can come back to bite you in the wallet. Now, I think most of us are automatically going to agree that that is a pretty poor way to spend $360 a year. However, there are positive circumstances where you absolutely should be paying for that service. In other words, under positive conditions, credit does win by finances.

Let’s take a quick look at when it would actually benefit you to pay for a credit monitoring service.

1) whether you suspect your identity has been stolen, and you do not want to freeze your credit report - In that case, monitoring your credit reports for 3 to 6 months would be a wise view considering it will allow you to quickly see whether anyone else is opening accounts in your name.

If my identity was stolen, I would freeze my report for 3 - 6 months. thereupon, after I un-froze it, I would place a swindle ready and purchase a monitoring service for an additional 3 - 6 months just to be on the safe side. In that case, you could probably skip purchasing your credit scores, and just view your reports. that would save some money.

2) whether you are trying to repair your credit after a default, judgement, or bankruptcy - Purchasing a credit monitoring service is particularly critical after bankruptcy considering you will need to be certain that companies whose debt was covered under

the bankruptcy do not continue reporting negatively after your bankruptcy is discharged.

3) To form certain your “credit repair” credit cards are reporting properly to all three credit bureaus each month. Let’s face it, repairing your credit is an expensive proposition. Secured credit cards require money up front. Unsecured credit cards for humans with poor credit often have high yearly fees, application fees, monthly fees, and even more fees when they raise your limit. Not to mention high interest rates whether you dare to leave a revolving balance.

So, whether you are going to all the trouble of paying for these types of things to repair your credit, soon after it makes sense to go the final mile and monitor your reports and scores. That is the only way to know whether or not your score is actually going up, and by how much.

One other thing - depending on how low your score was, it could take some moment to raise it. Monitoring helps you track your progress, and pick your next course of action. Finally hit above 700? You can qualify for better deals, perhaps even to refinance your high interest cards and loans. Above 720? Even more likely.

By paying to monitor your score regularly, you will prevent needless inquiries on your report. (Whoops, sorry, your score is 680 at Experian, not 700…Denied…) Monitoring will save instance, and give you the confidence you need to go apply for better deals as you qualify for them.

For a breakdown of the different credit score categories, you can click here (It’s in the middle of the composition.)

What do you think? Is using a credit monitoring service critical for folks with excellent credit too, or just those trying to repair their credit?

Have a question for us? Leave a comment below!

Orginal post by Jenna