Credit monitoring: May i recommend it....

[backtoschool]

What I object to is not whether one uses a credit monitoring service or not. Obviously there are pros and cons to both approaches. I object instead to the never-ending parade of snide remarks and judgments that are posted and aimed towards those of us that do not want to live in a tent, reuse our tooth floss to save money, and never have credit again.

I do not feel that anyone on this board has the right to tell me how to spend my $100.

That being said, if there is not a short term or mid term need to monitor fico scores, then credit monitoring might be overkill. As with anything in the credit rebuilding forum, ymmv and it depends on individual circumstances.

[HHM]

Here is the issue...we are talking "past" each other. You are talking about the practicality of it where my point goes more toward the underlying psychology of the decision making process to spend the money and the associated "perceived" need. Maybe you are right, maybe it is worth it for the first 6 to 12 months after BK. However, I am still of the opinion that a person can accomplish the SAME results to rebuild their credit post BK without spending a dime (hundreds of thousands of people do it that way).

My larger point goes toward the psychology of spending. I can't find the exact quote in the thread, but it was something to the affect of "I have the disposable income to afford it." That is a very telling quote as it goes to mindset. I would argue that there really is no such thing as disposable income. Your perceived disposable income today, is the money you will need to live on in retirement. That quote represents a short term mindset and could be used to justify any expense beyond reasonable necessities...and is how people get into money troubles.

I am not advocating a "survivalist" lifestyle. I am pointing out that the normal way most people make spending decision is inherently flawed and that you should be at least aware of it and consider other factors in spending decisions.

I don't think my posts in this thread have been particularly snippy, but not only do I disagree with the decision making process on spending money on the service, but I disagree with any underlying need for it in the first place. Here is why.

When you really think about, how often does the average person even need to use their credit score, (once every 5 years, for a car purchase...and now that we are past the real estate bubble were people were refi'ing there home every 9 months, maybe you need it for house once of 10 years, at most), for sake of argument, let's say every 3 years to update insurance and get new quotes. But whatever it is, most peoples credit score only becomes an issue on a time scale of years, not months. Over that length of time, credit takes care of it self so long as the person maintains good credit habits, and there IS NOTHING that could be on your credit report that you couldn't fix and fix the score before you embark on an endeavor. Thus, it seems entirely wasteful to monitor credit on a monthly/daily basis.

Your retort seems to be simply that it is not that much money, but where is the cut off, is there a cut off. If credit monitoring cost $500 per year, would you do it? That is the slippery slope, that is where I take issue with the decision making process because at some point, even in your reasoning there WILL BE a price choke point. At some point, a person will say, "it is too expensive, I don't really need it." All I am saying is that you need to evaluate the justification you will use to at the price choke to say the service is not a need and use that justification regardless of price.

[backtoschool]

Here is the issue...we are talking "past" each other. You are talking about the practicality of it where my point goes more toward the underlying psychology of the decision making process to spend the money and the associated "perceived" need. Maybe you are right, maybe it is worth it for the first 6 to 12 months after BK. However, I am still of the opinion that a person can accomplish the SAME results to rebuild their credit post BK without spending a dime (hundreds of thousands of people do it that way).

My larger point goes toward the psychology of spending. I can't find the exact quote in the thread, but it was something to the affect of "I have the disposable income to afford it." That is a very telling quote as it goes to mindset. I would argue that there really is no such thing as disposable income. Your perceived disposable income today, is the money you will need to live on in retirement. That quote represents a short term mindset and could be used to justify any expense beyond reasonable necessities...and is how people get into money troubles.

I am not advocating a "survivalist" lifestyle. I am pointing out that the normal way most people make spending decision is inherently flawed and that you should be at least aware of it and consider other factors in spending decisions.

I don't think my posts in this thread have been particularly snippy, but not only do I disagree with the decision making process on spending money on the service, but I disagree with any underlying need for it in the first place. Here is why.

When you really think about, how often does the average person even need to use their credit score, (once every 5 years, for a car purchase...and now that we are past the real estate bubble were people were refi'ing there home every 9 months, maybe you need it for house once of 10 years, at most), for sake of argument, let's say every 3 years to update insurance and get new quotes. But whatever it is, most peoples credit score only becomes an issue on a time scale of years, not months. Over that length of time, credit takes care of it self so long as the person maintains good credit habits, and there IS NOTHING that could be on your credit report that you couldn't fix and fix the score before you embark on an endeavor. Thus, it seems entirely wasteful to monitor credit on a monthly/daily basis.

Your retort seems to be simply that it is not that much money, but where is the cut off, is there a cut off. If credit monitoring cost $500 per year, would you do it? That is the slippery slope, that is where I take issue with the decision making process because at some point, even in your reasoning there WILL BE a price choke point. At some point, a person will say, "it is too expensive, I don't really need it." All I am saying is that you need to evaluate the justification you will use to at the price choke to say the service is not a need and use that justification regardless of price.

I do agree with you HHM that it is very important to change spending habits post bk. Since for the majority of us, poor spending habits got us into our pre-bk mess, changing spending habits and the psychology behind those spending habits is a very important part of post bk financial recovery.

But as to what constitutes "waste" or "thrift" that becomes a very personal matter in my opinion. One of the hardest parts of my post-bk recovery is the feeling that I am "stuck" with this black mark on my credit for ten years. It is a feeling granted, and it is a part of my psychology, also granted. By monitoring my credit score and working methodically towards the goal of buying a home in a year, I feel I have some control over my financial destiny. Now, I grant you that this feeling is most likely an illusion, but I am willing to pay for ten movies over the course of a year, at ten dollars a visit, and the movies are entirely illusion too, so for me, even if that $100 is pure escape and entertainment, it is worth the money to me to participate in the illusion that I have some control over my financial destiny and I am making progress.

As I said in a previous post to this thread, at some point everything but the basic necessities becomes a discretionary spending choice that could be foregone in favor of saving the money and putting it in the bank. But everyone should be able to spend some of their money on entertainment and non necessities. Consider my score monitoring purchase the equivalent of ten quick rides on a rollercoaster: a quick escape from my daily routine that makes me feel good and allows me to play in a world of fantasy for a few minutes.

[Amy26]

Yes, I agree with backtoschool. Nobody disputes that we need to be smarter spenders which means paying cash instead of charging up cards and making smarter purchases etc... but if I am being responsible and I'm doing perfectly well for my own lifestyle and I want to monitor my credit for however much money it costs per year, then by golly I'm gonna do it and it should not be deemed as "wasteful" or "I don't have my priorities" right.

Its not up to the members on this forum to pass judgement on others but to impart knowledge.

Its one thing to say "I personally don't feel the need to spend money on credit monitoring" and an entirely different thing to say "Anybody who spends money on this doesn't have their priorities straight and is wasting their money".

[bkdone]

Having been successfully through a CH13, I find credit monitoring to be very beneficial. I agreee that it's not neccessary for everyone, but I find the services beneficial. I pay $13 a month for MyFico Scorewatch and for me, it's money well spent. I do love getting the text messages that tell me my score has increased, but I also appreciate when it tells me my score has decreased; it makes me refocus. I like that it allows me to set the parameters about the texts I get- for example, if I increase my credit card balance by more than $200, I get a text (reminder.)

If a new account or inquiry shows up on my credit report, I'm aware of it immediately, instead of 3 months later like when I was pulling my reports quarterly. I also love the helpful tools and education that I get regarding my specific credit situation. With each report, MyFico analyzes my report (strengths and weaknesses) and gives suggestions of how I can improve my credit score. Its like a personal credit coach that helps you avoid pitfalls and shows you where your credit stands...how lenders view you.

With all that said, I agree with HHM- that over time and with consistent bill paying your credit will improve, but I find that credit monitoring is another important component. I dont believe in letting it tend to itself. It's important to know what is going on within the credit report world on a timely basis. Another big plus for having credit monitoring is now that I have a decent score, long credit history, and a generally good credit file again, I dont want anyone to wreck it. Identity theft is big, and I dont know that I'd be aware that someone opened a new account or was charging up one of my cards if I didnt have daily monitoring.

I view credit monitoring as a way of keeping me honest. As long as I'm paying that $13 each month, it's another reminder of the "bigger goal", which is to never get back into bankruptcy again. It's almost like the coins that you get in rehab (30, 60, 90 day coins...). When I see "MyFico" show up in my inbox, it reminds me about where I've been, and to stay on the path forward... Again, it's just me; I find it very beneficial.

[bkdone]

And another thing...

I don't think my posts in this thread have been particularly snippy, but not only do I disagree with the decision making process on spending money on the service, but I disagree with any underlying need for it in the first place. Here is why.

When you really think about, how often does the average person even need to use their credit score, (once every 5 years, for a car purchase...and now that we are past the real estate bubble were people were refi'ing there home every 9 months, maybe you need it for house once of 10 years, at most), for sake of argument, let's say every 3 years to update insurance and get new quotes. But whatever it is, most peoples credit score only becomes an issue on a time scale of years, not months. Over that length of time, credit takes care of it self so long as the person maintains good credit habits, and there IS NOTHING that could be on your credit report that you couldn't fix and fix the score before you embark on an endeavor. Thus, it seems entirely wasteful to monitor credit on a monthly/daily basis.

And, let me just say I couldnt DISAGREE with this more! HHM...I know you have been around for a long time, and you are considered a Guru here...but I too felt your comments were condesending and a out of line. I dont use my monitoring as a vanity plate, nor do I use my credit score as a source of feel good endorphins. Instead, I use monitoring as a very real part of everyday living...credit needs consistent tending.

HHM, you may believe your FICO score only comes into play when you are buying a home or a car...only needed every few years. But, that is not true. Credit scores and worthiness are taken into consideration on a regular basis for:

*new jobs
*getting a cell phone or utility services.
*car and life insurance rates
*getting a bank account
*renting an apartment
*increases or decreases in credit limits
*payment plans at the Dr or dentist.

I'm sure I could think of others, but the point is that companies we do business with on a regular basis are looking at and monitoring our credit. My car insurance and credit card companies make inquiries on my file twice a year. I have seen the affects in my car insurance; my insurance agent let me know that my rates had decreased due to my credit rating inproving. Have you ever tried to get a cell phone with bad credit? The deposit is $300, on top of the cost of the phone and service. I had Cricket for years because I couldnt get anything better due to my credit. I'm not downing Cricket, but for the areas that I travel to, the coverage was horrible and most of the time I had no signal.

Something to think about.

[HHM]

bkdone

I suppose we can agree to disagree

All those things you mention still don't require "constant" credit monitoring. I am willing to bet that overtime, as more distance passes from your BK and as you find that your credit stabilizes (about 2-3 years), you will find the service less and less valuable because very little will change on your credit once you reach a point of credit stabilization. As I said in a previous post, I don't discount the value this service has immediately post BK, I still don't think it is "necessary", but overtime (on a time scale of years) the value of the service becomes minimal and not worth any price.

[bkdone]

bkdone

I suppose we can agree to disagree

I am willing to bet that overtime, as more distance passes from your BK and as you find that your credit stabilizes (about 2-3 years), you will find the service less and less valuable because very little will change on your credit once you reach a point of credit stabilization.

Yes, we'll have to agree to disagree. But, let me point out...I'm 4 years post BK...my credit is stable. My 7 years post BK (as in dropping completely off my credit reports) is in 2 months (March 2011.) I still find credit monitoring very helpful and proactive. Hey...but that's just me.

[debee]

Completely off topic but can't pm this, so pardon me please. B2S, love the Ginsberg!

[backtoschool]

Completely off topic but can't pm this, so pardon me please. B2S, love the Ginsberg!

Thanks Debee! I was sick of my tired and boring bk statistics so I have decided to rotate some of my favorite poets, philosophers and dreamers in my signature. I sent you a friend request so that you can pm me next time.

As to credit monitoring, I think it is a cost effective and useful tool for keeping an eye on your fico. I consider it the equivalent of a blood sugar monitoring test or a blood pressure test for my finances, and by using myfico, I am at least getting an accurate number that reflects what creditors are seeing.

[bkdone]

I consider it the equivalent of a blood sugar monitoring test or a blood pressure test for my finances, and by using myfico, I am at least getting an accurate number that reflects what creditors are seeing.

Excellent analogy!!

[HHM]

I think its more like worrying about how much gas is in a car that has no tires

[backtoschool]

Wow, HHM, you really think very highly of all of our abilities to "get around" and prosper post bk. I didn't realize my "car" was doing so badly until you pointed out my "car's" deficiencies. Here I was driving around town, getting everywhere I want to go, never realizing that my car had no tires.....

I, of course, do not agree with your analogy. That is how I saw my finances pre bk, when I was transferring balances and trying to get get the best rate and worrying about my fico score when my debt was overwhelming. Post bk, I have a brand new set of all weather tires on my car. (that I used my credit card to buy and paid in full at the end of the month, to carry your analogy even further....)

[HHM]

It's meant to be funny, sort of battle of analogies. take it easy.

Also, you are over analyzing the analogy, I am merely expressing the idea that worrying about credit score is largely pointless in the grand scheme of things, but we disagree on that point, so no point in belaboring the issue.

Let's try another one, along the medical lines as the earlier post

"It's like taking your body temperature every 30 minutes for no reason"

[backtoschool]

I took it as intended.

Seriously though, I see your point. A blood pressure monitor cannot tell you if you have an ulcer, etc....

If there is an underlying spending problem still or other unresolved financial issues, monitoring a score is not going to solve that. I get it trust me.