3 Sneaky Ways Creditors Are Watching You & What to Do About It

Credit scores are a clear indicator that lenders and creditors are paying attention to your financial behavior, but they're looking at much more than that.
Written by:
Adam Beckles
Edited by:
Kristin Marino verified

Credit scores are a clear indicator that credit card companies and lenders are watching you. It’s no surprise that the companies you owe money to are paying close attention to your payment history, how much debt you’ve incurred, your debt-to-income ratio, credit utilization, and more.

In today’s world, where financial security is a top priority, you might be surprised to know that credit lenders and companies monitor consumer behavior beyond just checking credit reports.

This means you may be monitored more closely than you think, with a range of sneaky tactics used to track your financial behavior. In this article, we’ll discuss three methods that creditors use to monitor you, how they work, and what you can do to protect your financial privacy.

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 Transaction Monitoring

Transaction monitoring is one method creditors use to keep an eye on consumers. This refers to the practice of collecting information on an individual’s day-to-day transactions, such as credit and debit card purchases, online financial activity, and subscription services. While this monitoring does not necessarily record what each purchase entails, it can build a detailed profile of your spending habits.

A 2017 study found that financial institutions such as Visa and Mastercard collect every detail of a customer’s purchase and sell this information to marketing firms. This data is then used to build consumer profiles that advertisers use to target specific audiences.

 Social Media Monitoring

Many creditors now monitor customers’ social media activity to identify theft, fraud, or other criminal activity.

However, this monitoring is more invasive than simply identifying bad credit actors. It also involves gaining insights into a user’s personality, preferences, and other behaviors. For instance, if an individual frequently posts about their high-end shopping hauls or vacations, creditors may assume that the user is more likely to engage in high-end purchases, consistent with the habits of a high-income individual.

 Browser Monitoring

Perhaps the sneakiest way creditors monitor customers is by collecting data on their browser activity. This refers to collecting information on which websites customers visit, what they buy, and what they search for. These tactics are commonly used to build profiles of customers shopping online or using digital banking platforms.

Moreover, according to a report by the Centre for Digital Democracy, data collected through browser monitoring can also be used to build unfair – and potentially discriminatory – profiles of customers. To give an example, if a customer regularly searches for information on medical conditions or disability, this data can be used by insurance companies to increase premiums or deny coverage.

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 What Can You Do to Protect Your Privacy

So, what can you do to protect yourself against these sneaky monitoring methods? Here are a few tips:

  • Check your online activity regularly to ensure that unauthorized access hasn’t occurred.
  • Make sure your social media accounts are on a private setting, and don’t share too much financial information.
  • Use virtual private networks or VPNs to mask your browsing activity for an extra layer of privacy.
  • Monitor what you post online and, where possible, reduce your online visibility.
  • Review your bank’s privacy policies to ensure you know what information will be shared with third parties and opt-out/decline agreements whenever possible.

It’s essential to know how creditors monitor our financial behavior, given the potential for privacy infringements and discriminatory profiling.

All these insider intelligence work is not meant as anything malicious, but it does put lenders at an advantage. Remember that you’re in charge of your credit health and your financial history and future, so check your credit reports and think about these other “scores” next time your lender sends you any sort of new reading material in the mail.

By being aware of these sneaky tactics and taking measures to protect ourselves, we can stay one step ahead and ensure our financial behavior remains private and non-discriminatory.