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What to Do When Your Identity is Stolen

What to Do When Your Identity is Stolen

You’ve seen the commercials warning you to keep your information safe. You’ve heard horror stories of families facing year-long battles with creditors, banks, and insurance companies. But you never thought identity theft would be something you’d have to worry about. That is, until your credit card was declined when you went to pay for your lunch.

The truth is, identity theft can happen to anyone. If a thief’s intent on stealing your identity, he’ll do whatever he can to get his way. Of course, it’s those who are careless with their information and data who place themselves at the highest risk. If someone really wants to steal your identity, the least you can do is make them work extra hard to do so.

At any rate, if you happen to become a victim of identity theft, all is not lost. You’ll definitely face an uphill battle in the coming months – and possibly years – but there are steps you can take to ensure your name and reputation are cleared. The sooner you take action, the sooner you’ll be able to go back to real life.

Take Immediate Action

If your identity is stolen, wasting time worrying will only exacerbate the problem. Though you may still be dazed and confused after realizing you’ve been victimized, you can at least begin the process of rebuilding your identity by taking the following steps.

Document Everything

From the moment you realize you’re a victim of identity theft, you need to keep a running record of every step you take toward fixing the issue. Keep a log of every call you make, letter or email you send, and form you fill out. Note the date and time each was received or sent out, as well as the content of each instance.

By doing so, you have proof of the moment you realized something was wrong, and also that you are actively trying to fix the situation. You also keep a record of who you’ve contacted and have worked with while trying to solve the problem – in case there is a mixup on the other end.

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Contact Credit Reporting Companies

Once you’re prepared to document every conversation you have regarding your identity from here on out, contact a credit reporting company – Equifax, Experion, or TransUnion – to request that a fraud alert claim be placed on your account. Doing so will flag your account so companies know there is an issue that is currently being dealt with in regard to your credit score.

Request a Credit Report

Although you only need to contact one of the three companies to request a fraud alert claim, you should request a credit report from each of them. Although major damage has already been done, checking your credit report for ID theft will help you pinpoint when the security breach occurred, and will also keep you informed of any further issues with your credit score.

Create Official Reports

Once you have all the information you could possibly get from your credit report, you’ll need to file formal complaints. The first complaint to file is a report to the FTC. In this report, you’ll need to provide as much information as possible regarding the identity theft. Make a copy of this, of course – you’ll be using it immediately.

Next, file a police report at your local station. This will open the door for a formal investigation by law enforcement on your behalf. Together, these documents form a solid identity theft report, which should be sent to any banks, credit card companies, and businesses you work with.

Taking Care of Business

The main purpose of stealing one’s identity is, of course, to use their credit cards and other information to make fraudulent purchases. Once you have your claims in, you’ll need to track down exactly what the thief did with your information, and inform these companies of the issue.

Contact Companies You Work With

Most of us nowadays have multiple bank accounts, credit cards, and other open accounts involving our hard-earned cash. Unfortunately, when someone steals your identity, you’ll have to contact each and every one of these businesses to make sure they know what’s going on.

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When reaching out to these companies, ask to speak with someone in the fraud detection department. Workers in these areas should be able to notice discrepancies between your normal course of action and when you were victimized. Provide these companies with the identity theft report you previously created so they have solid documentation to work with.

Change Your Passwords

You undoubtedly have dozens of online accounts that store bits and pieces of your identity. Whether it’s your social media accounts, bank accounts, or credit card accounts, they all give away something about you. Be sure to change every single one of these passwords.

And make sure the new ones aren’t in any way similar to the previous ones. Your best bet is to make them a convoluted series of characters rather than your favorite TV show or the year your sister was born. Again: Don’t make it easy for thieves to get into your accounts.

Check For New Accounts

Since the thief has all of your information, there’s nothing stopping him from opening accounts in your name and running up the bill.

Use your credit reports to see if this has happened. If so, contact each business’ fraud department and be ready to provide them with a copy of your identity theft report. Hopefully, if you catch it quickly, they should be able to close out your account with little to no hassle.

Request Records from Businesses

While contacting each company to report the theft of your identity, request that they send you a record of your past activity with them. Some companies may be reluctant to do so. If this occurs, contact the police department where you filed the initial report and give them permission to contact these companies on your behalf. If need be, the police can subpoena this information formally.

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Dealing with Fraudulent Bankruptcy Claims

Thieves may have filed bankruptcy on your behalf, which will present major issues for you moving forward. Check with the US Trustee office, again providing them with all of the information you’ve collected thus far. Unfortunately, if a fraudulent bankruptcy claim has been filed, you may have to hire an experienced attorney to work through the issue on your behalf.

Other Outstanding Issues

There are a lot of other issues that may come up while you fight this seemingly uphill battle, but hopefully you won’t have to deal with the entire gauntlet. Your student loans, medical bills, and utility bills are all at risk of being used as means to nefarious ends. Keep track of them throughout the process of rebuilding your identity.

Reduce Your Future Risk

Once you start to get your life back on track, you’ll want to keep it that way for good. After what you’ve been through, you’ll probably be extra careful moving forward as it is. Make sure you take extra care in the following areas.

Keep Track of Credit Reports

Victims of identity theft have much freer access to their credit reports. Take advantage of this; check your credit score at least a few times a year as time goes on. Even if you do end up having to pay a small fee, it’ll be completely worth it to ensure you don’t have to go through the same nightmare again.

Keep Track of Important Documents

Even though you’ll probably want to shred the pages and pages of documentation regarding your identity theft case, keep them. You’ll likely need to provide them to any company you open accounts with in the future. And, if anything, they’ll serve as a reminder to keep your information safe from now on.

Protect Your Electronics

Make sure you use antivirus and antispyware programs on computers which you use to access important information. Spending a hundred bucks or so upfront will almost certainly save you money and time in the long run. Don’t ever use public Wi-Fi, period. Hackers are quite adept at accessing other users’ information through these networks, no matter how protected you think you are.

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When disposing of electronics, remember: Just because you delete a file doesn’t mean it’s gone. Find a program that will completely erase your hard drive to the point of no return. This may mean hiring an expert to help you out. But, once again: spending a little up front can save you a ton moving forward.

Conclusion

It’s a sad truth that criminals will do whatever they can to make their lives a little easier. Unfortunately, this often involves using technology against us – even technology that could be used to unite us.

If you become a victim of identity theft, you face an uphill battle. But that doesn’t mean you can’t come out of it stronger, more knowledgeable, and more wary than before.

Featured photo credit: Credit Card Fraud / Simon Cunningham / Flickr via farm8.staticflickr.com

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Matt Duczeminski

A passionate writer who shares lifestlye tips on Lifehack

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Published on January 8, 2021

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

Ever wondered whether your credit card debt is the reason you’re in a bad financial situation? You can’t enjoy any fun activities because a good chunk of your money goes toward debt payment. Heck, you’re even behind on some of your monthly bills.

The effects of clumsy debt management are too many to list here. This guide is going to help you discover how to pay off credit card debt fast and start chasing your financial goals.

Debt problems are the last thing anyone wants to encounter. But things can get out of hand when all the “little debts” you take accumulate in interests.

What if you knew some simple and proven ways to be debt-free quickly? Implementing them would mean better financial health for you. It becomes possible to free up cash for your “wants.” These include taking a trip or buying something you’ve always desired. All that while paying your bills on time!

Let’s not wait any longer. Here are 7 powerful tips for paying off credit card debt fast:

1. Pay More Than the Minimum Credit Card Payments

Many people only pay the monthly minimum on their credit cards. Truly, that’s the right amount for staying on good terms with your credit card company. But you need a different approach if you’re looking to achieve financial independence within a short time.[1]

Most of your payments go toward interest costs when you only pay the minimum amount. A substantial sum of your balance remains standing. As a result, it becomes more expensive to eliminate your debts.

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You don’t want to wait more than 10 years to get rid of debt while it’s possible to do it sooner. All you have to do is double that $100 minimum payment to $200 or go higher.

The good thing is that minimum credit card payments are affordable in most cases. By paying a higher amount, you reduce your interest costs, lessen your borrowing period, and boost your credit score.

2. Start With High-Interest Credit Card Debt

If you have more than one credit card debt, prioritize putting the extra money toward the ones with the highest interests. This debt pay-off strategy, known as the debt avalanche method, is essential for being debt-free quickly.[2]

First, you need to list down all the credit card debts you have in the order of their interest rates. Next, you choose the one with the highest interest and pay a significant amount toward it each month. It can be an amount twice or even thrice larger than the minimum payment.

At the same time, you make monthly minimum payments on the other debts. Their interest charges won’t be as costly as that of the first debt on your list. You only move on to the next high-interest debt after the first one is gone. Remember that your focus is on the interest rates and not the balances.

3. Revisit Your Budget

Budgeting is useful for tracking your financial moves. Once you create a budget, some tweaks along the way can make it work for you better. One situation that requires you to revisit your budget is when you’re struggling with debts. It might hurt a bit to slash some expenses. But you also don’t want to miss out on achieving financial freedom in the long run.

You can reduce some variable expenses to free up more cash for credit card debt payments. They’re the ones that change from time to time. Some examples are groceries, fuel, and clothing.

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Other opportunities for cutting down your spending lie in non-essential expenses. Instead of dining out all the time, you can cook at home more to save money. You can also share some subscriptions with friends and pay a fraction of the cost.

If you’re determined enough, you can eliminate all your unnecessary expenses and focus on paying off your credit card debt first.

4. Avoid Using Your Credit Cards

Do you want to know how to pay off credit card debt with a low income? One simple way is to stop using them. Having your credit cards everywhere you go means that you’ll be more tempted to buy unnecessary stuff. In this case, you spend money that you don’t really own and get deeper into debt.

The quickest fix to stop the debt build-up is spending with cash. You’ll be more aware of everything you can afford at any particular time. If you decide to keep one or two cards to ease the transition, always make wise choices. For instance, only use them when experiencing financial difficulties.

It’s best to categorize your fun activities under “discretionary spending” in your budget. This way, you won’t need more debt to kill your boredom. By halting your credit debt from accumulating, it’s easy to pay down what you already owe and be happy with the progress.

5. Start a Side Hustle to Boost Your Income

You’re probably turning away a lot of money by not monetizing your skills. Everyone has something that they’re good at doing. And you can use that to generate extra income for attacking your credit card debt.

If you look around your neighborhood, you can find several side hustle opportunities. It can be pet sitting, tutoring, or lawn mowing. You can start an online business by offering services such as digital marketing, content creation, and web development. Such skills go in high demand on freelance sites and job boards.

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Finding clients on social media is also a good strategy to utilize your skills and make more money. Facebook groups, Quora Spaces, and subreddits are some places to look for side jobs. You only have to join a niche-specific platform, share your services, and respond to any opportunities.

It’s possible to learn a skill, practice it, and earn from it. Use the free resources online or purchase some e-courses to get started.

6. Sell Your Used Items for Extra Cash

Starting a side hustle isn’t the only way to generate extra money. You can turn unwanted items into cash for paying off credit card debt. Whether it’s an old TV, book, or furniture, there is always someone itching to buy your used stuff.

A garage sale, as much as it’s old-fashioned, is perfect for getting your neighbors and passers-by to buy from you. You keep all the money because there are no business permits or taxes involved. While you may not make much cash, it’s better than leaving your stuff to go defunct in your storage.

Other than that, you can sell your used stuff on online marketplaces. Facebook groups are great places to start if you want quick approvals and hence sales. You only have to ensure that your listing follows Facebook’s commerce policies.

When selling any pre-owned items online, ensure they’re in good shape to avoid problems with your buyers.

7. Know When to Seek Help With Your Debt

Asking for help with your credit card debt can be challenging to do. But letting it drown you is a road you don’t want to take. While you may feel embarrassed at first, it’s the best way to get back on track when you run out of options.

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There are tons of non-profit credit counseling organizations that can offer you free guidance on how to escape the debt trap. An example is The National Foundation for Credit Counseling. They simply review your finances and help you determine the source of your financial problems. After that, they match you with an actionable debt management solution.[3]

In extreme cases, the debt solution can be:

  • Debt relief – where your debt is partially or wholly forgiven
  • Debt consolidation – taking out one loan to repay others
  • Debt settlement – the creditor forgives a significant portion of your debt
  • Bankruptcy – legal process for seeking relief from some or all your debts

It’s necessary to carefully weigh your options before deciding on the way to go. Find out how it might affect your credit score and any other risks.

Wrapping It Up

Debt is a major setback when you’re trying to prosper in life. Paying off credit card debt is essential if you want to reach your financial goals. That means having more free income, a good credit card score, and even a chance to retire early. You become more productive each day because of the peace in your mind.

So, you now have some tips on how to pay off credit fast. Go ahead and get rid of that good life progress killer!

More Tips on How to Pay Off Debt

Featured photo credit: rupixen.com via unsplash.com

Reference

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