- Create a credit score improvement plan by assessing factors affecting your credit score
- Improve your chances of securing credit with a rising credit score
- Identify loan frauds
Credit reports are essentially the summary of how you’ve led your financial life. Are you financially responsible? Do you frequently need credit? Do you always max out your credit cards? All of your financial behavior is noted in your credit report and compiled by credit bureaus upon receiving information from your lenders.
A credit report usually contains:
- Your personal information
- Any active/closed loan accounts
- Loan inquiries
- Credit limits
- Credit utilization
- A credit score that sums up all of these factors
If you have a poor credit score, one of these factors is probably negatively affecting it. Checking your credit report can therefore help you understand how to work on an improvement plan to bring it up.
Furthermore, a credit report could help you check for erroneous entries caused by lenders or even cases of identity theft. Since the pandemic, financial losses due to identity theft cases have reached hundreds of billions of dollars nationwide. Miscreants use stolen government IDs, banking information, and other personal information of victims to open loan and credit card accounts in their name.
So, if you notice any changes to your personal information or new loan inquiries or accounts you don’t recognize in your credit report, immediately raise a dispute with the concerned credit bureau. They will then contact the lender and verify certain details to help you understand the problem better. In case it turns out to be identity theft, you will have to lodge a cybercrime report at a police station as soon as possible to contain the damage done to your financial rep.
How to Stay on Top of Your Credit Report
Join the 100 million-strong community of Credit Karma to check your credit report from Equifax and TransUnion for free. Credit Karma’s free credit monitoring features alert you of any changes in your credit report related to your personal details, new loan inquiries or accounts, and even credit limit changes in real-time.
If you are doubtful of any information you see, you may easily raise a dispute to the concerned credit bureau through the app as well.