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How do I protect my credit?

How do I protect my credit?

5 Ways To Protect Your Credit From The Brink Of Disaster

Identity theft, job loss, divorce, illness, predatory lenders – these are only a few of the hazards that threaten our credit every day.

Suze Orman, Dave Ramsey and other credit and money gurus have made a living telling us how stupid we are for making financial mistakes, but they need a reminder themselves.

Life has ups and downs.

Instead of berating the public for bad choices, let’s point the finger at the real problem:

There is no mainstream financial education to provide preventative care for our finances.

Everything we learn is by trial and error.

For example, where did your parents learn what to do with money?

Are they confident enough in what they learned to pass it on to you?

Most parents might say they are not confident enough in their own financial education to pass down what they know to their children.

This isn’t their fault.

What was the name of your elementary school financial education teacher?

What grade did you get in your high school financial education class?

What was your undergraduate financial education teacher’s name?

Have a hard time answering these questions?

None of these teachers, grades or classes exist!

Which leaves us in a position to face life’s downs with inconsistent, unpredictable and often unreliable information.

When you live 1 – 2 payments away from bad credit and financial ruin, I call that, “Living On The Brink of Disaster.”

You can read more about the failure-based mindset in my free ebook, The Epic Guide to Achieving Credit Mastery: How To Use Your Personal Credit as a Resource to Improve Your Life.

So how do we protect our credit and income from the Brink of Disaster?

5 Ways You can Protect Your Credit From The Brink of Disaster

First, you need a reliable foundation of knowledge for your personal credit for preventative care. 

I recommend picking up your own free copy of the book: Better Than Credit Repair: The Handbook of Credit Mastery.

This best-selling book not only will help you build the proper foundation for your credit standing (which every person needs), but it will also help you prevent living on the brink of disaster by showing you how proper financial education works hand-in-hand with credit.

With step-by-step guides.

Second, diversify your income. 

If you have one income and something happens to it, you have left your credit completely unprotected.

Immediately replacing that income could be hindered by countless situations in your life and may even be impossible on short notice.

But if you have five incomes and something happens to one, your credit continues to be protected and you only have to worry about replacing one income at your leisure.

You have thousands of options for creating alternate incomes outside of your job.

Here are just a few:

  • Royalty payments
  • Stocks
  • Real estate
  • IOUs
  • Many more!

Research the methods that interest you and work to get them started.

Setting up royalty payments was the best decision I could make to diversify my income because it doesn’t require me to be there for it to continue to work.

Third, invest in credit monitoring.

When you monitor your credit, you get up to the minute notifications for collections and inquiries added to your credit reports and changes in your credit scores.

MyFICO.com provides constant credit monitoring for a monthly fee as well as access to your FICO scores and credit reports

CreditKarma.com provides you with free credit reports and FICO scores for two credit bureaus with the option of credit monitoring.

Pulling your credit reports at least every 6 months will allow you to prevent problems before they have had a chance to create major damage.

Fourth, keep your personal information in a fire-proof safe.

Your social security cards, birth certificates, banking information, any extra identification cards such as passports and other personal information should not be carried with you unless you are going to use them immediately.

These documents are sensitive and their misuse could quickly cause tens of thousands of dollars of damage.

Protect your personal information from identity theft by keeping them put in a safe place that only you can access.

A friend of mine kept his birth certificate folded up in his wallet until he mistakenly left it in a jacket pocket at his job.

When he returned to his job the next day, he found his wallet stolen! 

He had to get a new copy of his birth certificate, cancel his credit cards and get a new driver’s license issued.

He later found that there was a cable bill in his name that was over $700! 

The only way he was able to find this information out was by calling to get cable services for his new apartment because the address wasn’t his.

He was informed that until he paid the bill of $700, he would not be able to get cable services on in his name.

Only carry your personal documents with you if you know you need to use them that day at a social security office, school financial aid or for other important business.

Fifth, report suspicious activity on your credit reports to police right away.

If you find suspicious activity such as:

  • multiple misspellings of your name
  • addresses you don’t recognize
  • collection accounts you have never seen

Make a police report and include all positive and negative information you do not recognize.

These are all signs of identity theft and it is best to report it right away.

Most people don’t know that their identity has been stolen for at least four months!

Be sure to check your credit reports regularly and report anything you see that is suspicious.

Be your own knight in shining armor

Take these five steps and you will be sure to protect yourself from any potential threats.

Which of these methods do you currently use? Which methods will you try within the next 30 days?

I hope you enjoyed this article. If you have any questions about techniques you can use to protect your personal credit, or you want to leave your own review about things you’ve done to protect your own credit, leave a comment below.

If you are interested in starting the approval process off with raising your credit scores for free, I invite you to take my free, four-part, Dispute Letter Mastery Course.

In this course, you will learn how to update your personal information, dispute information that has errors, and delete negative information in order to raise your credit scores 50 – 75 points in only 45 – 60 days. A boost like this can really make a difference in your interest rates, and it is all free.

8 comments

  1. Katerina Markakis

    Hello there!
    I just happened to find your website and I love the information shared here! I am new into building my credit and a good piece of advice I can always use it!
    I am currently applying for a couple of credit cards and I hope I get approved!
    Thank you so much for sharing and I can’t wait for more posts!

    • Hi Katerina,
      I am glad you found me! I suggest checking your credit scores and researching the car lender you want to be approved through before allowing a credit dealer to pull your credit. You will be less likely to be a victim of predatory auto lending and will be more likely to be approved.

      Tamara

  2. I totally agree that it’s silly that there is no mainstream financial education for everyone! I don’t think I learned this stuff in school until high school, or even later! And it’s made so much worse by how companies and banks make credit seem like this magical protective blanket that will take care of us without us having to do anything.

    Thanks for the great tips about protecting credit! Diversifying your income is a great one that I wish I’d known years ago.

    • Hi Samantha!
      Thank you for your comment! I am happy that you were able to take something away from the content here. You are right about this magical idea that leaving your credit alone could possibly benefit us! It’s terrible that this is the foundation we are really given. Most of us don’t learn until we make major mistakes that can take years to overcome. Taking steps to be deliberate about how we learn about and manage our credit is essential to our ability to care of our basic needs. Thanks again!

  3. Great information. I love the tip about diversifying your income. I have never really thought about that before – I have my job as my main source of income and I really don’t know what I would do if I lost it. I now have a lot to think about on how to make that second or third income source!

    • Hi Maura, thank you for for commenting!

      You are already far ahead of the majority of people because you have started writing blogs to monetize. Each of your blogs has the potential to create a stream of income for you, and I know at least one of those is producing sales for you, so keep doing what you’re doing! Even though you didn’t do it with the intention of diversifying your income, you’re already ahead planting those seeds. Congratulations! Keep that going! :)

  4. Finally I found a website with all the information that I was looking for.
    You have some great information here! I am just learning about How to protect my credit, so I learned a lot.
    Thanks!
    You saved my day.

    • Hi Emanuel,

      Thank you for your comment! I am glad my website was able to help you! I try my best to make sure the content I am creating is useful and purposeful for you. Let me know if you have any specific questions.

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