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Your credit score determines your creditworthiness to lenders when applying for loans, credit cards, and mortgages.
Your credit score determines your creditworthiness to lenders when applying for loans, credit cards, and mortgages. Pexels

In a nutshell, your credit profile is a summation of your loan repayment history, credit utilization, credit mix, and even loan application records. It determines your creditworthiness to your lenders whenever you apply for credit cards, loans, mortgages, and insurance policies.

Nowadays, many Americans are more concerned about growing their savings, investment portfolios, and emergency funds. However, they seem to remain unaware of the protective measures that should be in place to prevent incorrect credit reporting and cyber crime - things that could turn their financial lives upside down.

There are actually several advantages to checking your credit profile on a regular basis:

Improve Your Financial Credibility

If you have missed credit card deadlines or personal loan repayment dates multiple times, it is likely that you have lost many credit points in the process. What's more, negative entries could stay on your credit profile records for years. Unfortunately, when you apply for a loan or a mortgage, 90 percent of lenders will check your credit score before delving into other details.

The first step in setting goals to improve your credit rep is to regularly check your credit profile from any of the major credit bureaus so you will know the factors that affect it and what you can do to fix it. You could start by making timely payments towards high-interest credit card loans, for instance.

Dispute Incorrect Financial Entries in Your Credit Report

There are times when lenders might register incorrect late payment charges or repayment records in your credit profile, and this could stunt the growth of your credit score, as well. A Consumer Reports survey of nearly 6,000 volunteers actually revealed that 34 percent of them have found an error in their credit report in the past, while 29 percent found errors related to their personal information.

Unfortunately, any credit reporting caused by late or incorrect entries could stay on your credit profile for years, and your lenders could have access to them when you apply for a loan or a credit card. The best way to tackle these issues is to raise a dispute with the concerned credit bureau as early as possible. After that, the bureau will get in touch with your lender to verify the details and correct them as needed.

Prevent Financial Identity Fraud

Financial identity theft is a growing monster. A person could illegally get access to your financial credentials like your driver's license and Social Security numbers to secure loans, apply for credit cards, file tax refunds, and even open electricity or gas connections.

According to the 2021 U.S. Identity Theft: The Stark Reality online survey of 8,653 Americans, financial identity theft has affected nearly 47 percent of Americans. In addition, the report mentioned that identity theft cases cost people an astonishing $712.4 billion in 2020 compared to $502.5 billion in 2019, and could be on track to reach $721.3 billion by the end of 2021.

Another surveillance report from the Federal Trade Commission's Consumer Sentinel Network found that identity theft complaints reached 4.7 million in 2020 from 3.3 million in 2019. Although keeping your personal credentials is key to protecting yourself from fraudulent activities, there's no full-proof solution to identity theft. In case you suspect a financial credential leak, acting early is the best way to move forward.

If you ever find incorrect loan or credit accounts or changes to your personal information in your credit profile, it would therefore be vital for you to raise a dispute to find out if it's an incorrect entry. It might also be a case of identity fraud. Finding out early by regularly checking your credit score and getting help as soon as possible could therefore save you contain the damage to your credit rep.

A Credit Monitoring Software for Complete Oversight

With over 15 million members, Credit Sesame is a financial firm that offers free monthly credit reports from TransUnion, identity theft protection features, and assistance in filing disputes with TransUnion for incorrect credit reporting.

The TransUnion credit report from Credit Sesame details your active and closed credit or loan accounts, credit inquiries from lenders, late payment charges, and credit utilization so you can better understand the factors that negatively impact your credit score.

If you notice any suspicious activities, you may raise a dispute with TransUnion with the help of Credit Sesame for a resolution. You may also turn on the identity monitoring feature on their platform to get notified of any changes to your personal information as well. This way, you have much better chances of identifying cases of identity theft or incorrect reporting earlier on and avoiding damages to your finances down the road.

Check your credit profile on Credit Sesame for free today.