What Is Credit Monitoring?

Credit monitoring is a service that tracks changes to your credit report and alerts you when certain activity appears.

It can help you follow your credit history, identify errors and spot signs of identity theft, such as an account or credit inquiry you do not recognize.

KOHO Credit Builder

KOHO Credit Builder helps Canadians establish or improve their credit history through consistent monthly payments, without relying on a traditional credit card.

With KOHO Credit Builder, you can:

• See an average credit score increase of 74 points*

• Get approved without a hard credit check or minimum deposit

• Pay no interest on the line of credit

• Track your credit score and credit report directly in the KOHO app

• Build credit history through monthly payments reported to the credit bureaus

How Does Credit Monitoring Work?

Credit monitoring services watch your credit file for changes.

Depending on the service, you may receive alerts when:

• A new credit account is opened

• A lender checks your credit

• A payment is reported late

• Your credit limit changes

• An account balance changes significantly

• A collection appears

• Certain personal information changes

Alerts may be delivered through an app, email or text message.

What Does Credit Monitoring Help With?

Credit monitoring can be useful for several reasons.

Spotting potential identity theft

If someone applies for credit using your information, a new inquiry or account may appear on your credit report.

An alert can help you identify the activity sooner.

Finding credit report errors

Incorrect balances, accounts or payment information can appear on a credit report.

Monitoring your file makes it easier to notice changes that do not look right.

Following your credit progress

If you are trying to improve your credit, monitoring can help you see how your report changes as balances decrease and payments are reported.

Preparing to borrow

Reviewing your credit before applying for a mortgage, car loan or other financing gives you time to identify potential problems.

Does Credit Monitoring Prevent Identity Theft?

No.

Credit monitoring can alert you after certain activity appears on your credit report, but it cannot stop someone from stealing your personal information.

You should still protect yourself by:

• Using strong, unique passwords

• Turning on two-factor authentication

• Protecting your Social Insurance Number

• Avoiding suspicious links

• Monitoring bank and credit card transactions

• Being cautious when sharing personal information

Think of credit monitoring as an early-warning system rather than complete identity theft protection.

Does Credit Monitoring Hurt Your Credit Score?

No.

Checking your own credit information is generally considered a soft inquiry and does not affect your credit score.

You can monitor your report regularly without worrying that the checks themselves will lower your score.

This is different from a hard inquiry, which may occur when a lender reviews your credit as part of a loan or credit card application.

What's the Difference Between Credit Monitoring and Checking Your Credit Report?

Checking your credit report is something you do manually.

Credit monitoring continuously watches for certain changes and sends you alerts.

For example, you could review your report once every few months and not notice a new account until your next check.

A monitoring service may notify you shortly after that account appears.

Using both approaches can give you a clearer picture of your credit.

Does Credit Monitoring Track Your Credit Score?

Some services do.

A credit monitoring tool may provide:

• Your current credit score

• Changes to your score

• Factors affecting your score

• Credit report information

• Notifications about new activity

However, not every service provides the same score.

Different lenders and credit monitoring services may use different scoring models, so the score you see may not be identical to the one a lender uses.

Equifax vs. TransUnion Credit Monitoring

Canada has two major credit bureaus: Equifax and TransUnion.

Not every lender reports information to both.

This means an account could appear on one credit report before appearing on the other, or may only appear with one bureau.

If you want a complete picture of your credit history, periodically review information from both bureaus.

Is Free Credit Monitoring Enough?

It can be for many people.

Free services may provide basic information such as:

• Credit score updates

• Credit report access

• Alerts for certain changes

Paid services may offer additional features such as more frequent alerts or identity theft monitoring.

Before paying, check whether the features you need are already available through your bank, financial app or credit bureau.

What Should You Do if You Get an Alert You Don't Recognize?

Investigate it immediately.

If you see an unfamiliar account or inquiry:

1. Review your credit report.

2. Confirm that you did not authorize the application.

3. Contact the lender associated with the account.

4. Dispute incorrect information with the credit bureau.

5. Change compromised passwords if necessary.

6. Monitor your financial accounts for other suspicious activity.

If you believe your identity has been stolen, you may also want to place fraud alerts on your credit files and report the incident to the appropriate authorities.

How Often Should You Check Your Credit?

Even with monitoring turned on, review your full credit reports periodically.

Checking them can help you confirm that:

• Your accounts are accurate

• Balances are correct

• Payments are being reported properly

• Closed accounts are shown correctly

• You recognize all inquiries

It is especially useful to review your credit before applying for a major loan.

Is Credit Monitoring Worth It?

Credit monitoring can be worthwhile because it makes it easier to catch unexpected changes without manually checking your report every day.

It is especially useful if you are:

• Building or rebuilding credit

• Preparing for a mortgage

• Concerned about identity theft

• Monitoring several credit accounts

• Trying to correct past credit problems

Credit monitoring does not improve your score by itself. Its value comes from helping you understand what is happening on your credit file so you can respond quickly when something changes.

*Based on users with a starting score of 450 or under and who used all of our credit building tools (i.e. Credit Building, Secured Credit Building) for 12+ months with on time payments. Credit building tools we offer are not a credit repair tool and does not guarantee an improvement in credit score. Credit scores are based on complex models involving a variety of factors. Consistent on-time payments help improve scores and missed or late payments may cause credit scores to decrease. Outcomes may vary among users.