Preventing Credit Damage

[Apr 16, 2008.]

 

While a lot of people focus on dealing with credit issues once they've become significant, the truth is that it's a lot easier to handle financial troubles before they even begin. With the new surge in identity theft and fraud, you need to make sure that you're monitoring your financial records as well as handling the expenses you have in a timely manner – together, these steps will ensure a healthy financial future.

If you don't have any credit issues now, you're one of the lucky few. However, if you're not protecting yourself from hackers and other thieves, you just might be on your way to more financial issues than you want. Here are some basic tips for keeping your credit score high and your safety intact:

• Know who you're handling information out to – No matter where you are and what you're doing; think about who you're handling your credit card or debit card over to. This is especially the case when you're trying to buy goods online and you can't see the store or the store owner that you are dealing with. Try to only work with those that are reputable in nature and those that have security devices in place – Hacker Tested, VeriSign, etc.


• If you're not comfortable with a transaction, don't do it – Whenever you feel even a little uncomfortable with a financial transaction or something just doesn't seem right, don't follow through with it. Or, if you need to make the transaction, go and get cash.


• Protect your computer – Instead of learning the hard way about how easy it is for hackers to get into your computer, make sure that you have up to date virus software as well as firewalls in place. It might sound obsessive, but a Trojan virus can access your system quite easily, leaving the hacker with a clear view of your financial records, passwords, etc. If you're unsure of how to protect your computer, take it to a computer repair shop or talk to your computer dealer.

If you're just beginning to have credit issues, then you will want to start dealing with these problems earlier instead of later.

Here are some ways to minimize the damage of financial troubles:

• Take on another job – If you are living beyond your means, you need to begin to extend those means. If this means taking on an additional job in order to pay off debts, then this is what you should do. The extra time that you’re spending at this job will remind you of the money that you've spent and may cause you to rethink excessive spending in the future.


• Cut up your credit cards – It sounds harsh, but if you’re starting to use credit cards more than cash, cut them up and break that habit. While it might not seem like a big deal to have a $1000 balance on your credit card, paying this off only with the minimum payment will take you about three to five years (depending on the interest rate) and will end up costing you well over the original amount.

Credit damage doesn't have to be a part of your life when you realize what you might be doing to contribute to it.