No one plans to become a target of identity theft. Having your identity stolen can seriously damage your financial situation, not to mention take a toll on you mentally. Freezing your credit report is one way to combat ID theft.
Check Credit Report for Activity
You may already be on a schedule of checking free credit reports from the three major credit bureaus each year. Go a step further and ask for a credit freeze. This basically seals your credit report and requires you to give a PIN number to thaw it for a short period of time when you apply for credit.
A credit freeze is free if you’ve already been a victim of identity theft. Otherwise it costs about $3 to $10 depending upon where you live.
Help with Debt
Not only can freezing your credit report keep away ID thieves, but it could help with debt you already have. You may be less likely to apply for a lot of credit if you have to go through the hassle of paying a fee (up to $10) each time you want to unfreeze the report. That can keep you from taking on new credit and give you more motivation to pay off existing credit card debt.
If you plan to apply for a mortgage, auto loan, or other type of credit soon, it may make sense to hold off on doing a credit report freeze until after that. Contact each of the credit bureaus when you are ready to freeze your report.
Getting out of debt is easier said than done, but debt consolidation can help under the right circumstances. When used as part of a comprehensive debt management plan, a debt consolidation loan or program can help you streamline bill paying and track your progress as your debt decreases.
Debt Management: What’s involved?
Debt management doesn’t work unless it includes these approaches for managing, repaying, and eliminating your debt:
Establishing and keeping a cash based budget: Knowing how much income you have and how much you must pay out each month to meet living expenses and pay your debts is the starting point for revamping your finances and managing debt. Credit counseling and debt consolidation programs also emphasize the importance of emergency and long term savings.
Tracking what and who you owe: Setting up a spreadsheet or other tracking system helps you prioritize, pay, and manageyour debt. You want to list who you owe, how much, the annual percentage rate (APR), and minimum monthly payment for each debt. Schedule payments for a few days prior to their due dates to avoid penalty fees. It’s also important to keep track of payment amounts and dates.
Know where you are: If you find that making minimum payments puts your cash budget into the red, it’s time to get debt help. Consumer credit counseling services can help you work out a debt consolidation plan with affordable payments based on a cash budget.
Know where you want to go and how to get there: Freedom from debt can require time, effort, and sacrifices; you have to give up instant gratification to stay on track and live within a cash budget. Credit counseling and debt consolidation programs typically require closing all credit card accounts as a condition of participating in their programs, but if you can’t pay off your debt without help, these services can help you get and stay on track toward managing and paying off high cost debt.
Avoiding trouble along the way to being debt free: Desperation can lead to making poor debt management decisions; taking out new credit to pay off old bills can easily lead to more debt. Credit card balance transfers can help with debt consolidation only if you monitor low introductory rates and can completely avoid making additional credit card purchases. Contact a certified credit counselor for help with unmanageable debt.
There is no shame in asking for help with getting out of debt. The sooner you begin a debt consolidation and/or credit counseling program, the sooner you can be debt free.
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Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.