Building good credit has become a necessity for many people nowadays. Aspiring business owners need to loan money for the start-up expenses of a planned business. Many students make loans for their education. There were 176.8 million credit cardholders in 2008. People make car loans, house loans, and other loans to meet their various needs. The credit activities of individuals can influence their other transactions or endeavors such as employment, insurance policy application, and subsequent loan request.
For example, if you want to make a car loan, you go to lenders like banks to make an application. The lenders will evaluate your credit worthiness by examining your credit score. A credit score is based on the credit report provided by consumer reporting agencies, such as the three major credit bureaus Equifax, Experian, and Trans Union. These companies collect records of your credit activities and sell them to creditors, insurers, employers, government agencies, or anyone who is eligible to access a person’s credit report.
If you have a good credit history, e.g., you pay bill payments on time, then you don’t have to worry, unless your credit report contains some errors. Statistics show that 79% of credit reports contain a mistake or error of some kind. These errors can still be corrected though. The main thing that you should worry about is identity theft or fraud. Identity theft happens when someone else commits crime or makes transactions using your key information such as your Social Security Number or Driver’s License number. In the end, you get to pay for the crime or the credit that you did not make, or worse, you suffer the consequences of having a bad credit score for activities you are not responsible.
The best way to protect you from errors or identity theft is credit report monitoring. You are entitled to a free copy of your credit report from each of the three major bureaus once a year, but this is not enough. You will need a regular update of your credit report every time you make a credit activity, when another party attempts to use your information to do so without your knowledge or if you just want to keep an eye on your credit. Several credit report monitoring services are available to provide you with such updates. LifeLock, for example, provides prompt credit theft alert to their clients. Anytime a LifeLock client’s credit is checked, they call their client, to check if it is actually the client who is making the transaction. They won’t approve it unless they get a confirmation from the client. They place the fraud alert in all three of the major bureaus, as well as in other consumer reporting agencies. Other reliable companies include IDENTITY GUARD, TrustedID, and Suze Orman.
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