Your credit report is a representation of your financial habits.

Many people argue that using your credit history isn't always fair -- especially when it's used for non-loan purposes. Fair or not, though, your credit history is your financial reputation, and you need to protect it.

1. Fix Errors

In some cases, errors on a credit report can lead to an adverse action. A mistake in your payment history can drag down your credit score, and mean higher insurance premiums, or higher interest rates on a loan.

Check your credit report regularly, and you can catch mistakes that might lead financial service providers and others to assume that you aren't as responsible as you are. Once you identify the errors, go through the dispute process and make sure they are corrected.

2. Catch Identity Theft

If someone is using your identity to open new lines of credit, it's going to show up on your credit report. Regularly checking your credit report can help you catch identity theft somewhat early on. You can identify fraudulent accounts, and have them closed.

You might need to freeze your credit at this point to prevent further fraudulent account openings. But, in some cases, you'll never know if you are compromised if you don't check your credit report. Your credit report can be the first indication that something is wrong.

3. Avoid Unpleasant Surprises

One of the recurring issues on my credit report is the fact that some of my student loans, and some of my husband's student loans, are double-reported. Even though we've both consolidated our student debt, sometimes a loan that has, technically, been paid off resurfaces on the credit report. This is frustrating because when our debt-to-income ratio is figured, it looks as though we have more debt -- and higher payments -- than we actually do.

Check your credit report ahead of time so that you can avoid unpleasant surprises while you are actually speaking with the loan officer. You want to be able to take care of these problems ahead of time, so that they don't slow down your loan process.

4. Improve Your Finances

Your credit report can offer you a way to track your financial progress. Taking a look at your credit report can show you where you need to improve, as well as help you see how far you've gone. There's something about actually seeing it right there in front of you that can help you make improvements.

If you see that you have been missing credit card payments quite a bit, you can make adjustments to automate your payments or arrange to send in your payment earlier to avoid the disappointing payment record. You can also see how far you come as you watch dwindling balances, and see other signs of financial improvement.

5. See Who's Been Checking Up On You

Your credit report also includes the names of companies that have been looking at your history. Even if you don't apply for credit, it's possible for companies to make a "soft inquiry" into your credit to see if you "qualify" for certain offers. If you do, they might send you marketing materials.

Checking your report can allow you to see who's been checking up on you, and it's possible to contact these companies to be removed from their lists.

Bottom Line

Your credit report contains plenty of information about you and your finances. Others are looking at it, so you should make it a point to know what's in there as well.

What other things can you learn from your credit report?

Miranda Marquit

Miranda lives in Utah and is a freelance writer and professional blogger, specializing in topics related to personal finance and business. Her work has appeared in, and been linked to from, a variety of publications, online and offline. Miranda blogs for a number of web sites, and has her own personal finance blog, Planting Money Seeds.