A credit report contains a lot of valuable information such as credit accounts you’ve opened, loan amounts, balances, and payment habits. It also includes information about any bankruptcies, liens, and any collection agency attempts to collect past due funds.

One good reason you should monitor your credit report is to check it for errors. CBS News reports that four out of five credit reports have errors on them. Errors can range anywhere from name misspellings and incorrect Social Security numbers to accounts being listed as still open when in fact they have been closed–an error that can hurt you when you need to get a loan or mortgage. Mistakes can also come if one of your creditors is reporting incorrect information. If your credit report has errors, they should be corrected as soon as possible. Get tips on how to improve your credit score.

But probably the best reason you should monitor your credit report is to make sure you haven’t fallen victim to identity theft or fraud. Identity theft is becoming so much more prevalent these days–the Better Business Bureau reports that in 2005, 9.3 million people were victims of identity theft. Checking your credit report can help you find out if your personally identifying information such as your name, address, birth date, account numbers, and Social Security number have been compromised.

Thanks to Federal law, everyone is now entitled to one free copy of their credit report per year from each of the three credit reporting bureaus: Equifax, Experian, and TransUnion. To do this, you must visit AnnualCreditReport.com.

It’s important to know that your information is being bought and sold everywhere–it’s why you receive so many pre-approved credit offers in the mail. In order to reduce the chances of becoming a victim of identity theft, visit www.optoutprescreen.com or call 800-5-O-P-T-O-U-T (800-567-8688) to have your name removed from marketing mass distribution lists. You can be opted out for five years or permanently. It may take up to 30 days, but you should soon see a reduction in the amount of junk mail you receive.

If you’ve already fallen victim to identity theft, your credit history and score can be damaged, sometimes seriously. That, in turn, can hurt your chances of getting better loans and mortgages. If your identity has been compromised, file a report with the Federal Trade Commission (FTC) and with your local police. They can help you resolve your case so that you can begin to repair your credit profile. For more information on how to do this, please go to www.consumer.gov/idtheft.

Your credit information is highly valuable both to you and to those who would commit fraud for their own profit. Protect yourself by keeping a close eye on where your information goes and on the information contained in your credit report.

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