Tips to Manage Credit As a Single Mom

Source: Pinot & Dita, Flickr.com

Source: Pinot & Dita, Flickr.com

The following post is a guest post.

Single moms can sometimes get a raw deal out of life, especially since they have to fend for themselves and their whole families all on their own. The balancing act of juggling work and taking care of their children could leave them weary. It is not surprising that in this exhaustion, a single mom will get more complacent with her family’s finances, to the point of possibly neglecting to manage credit properly. This is why, in some cases, the bad credit effects just creep up on the single-parent households. This is why any adult, single mom or otherwise, has to closely guard their credit history.

One way to manage credit and to safeguard one’s credit history is through a regular credit check. A single mom should manually check on her accounts regularly to see if there are any major changes. She can also take advantage of credit monitoring services, which can also serve as a form of id theft prevention. By monitoring, if her account has been compromised finding out and reporting it immediately she may be able to stop any unauthorized charges and halt full blown identity theft. With these measures, a single mom can manage credit better and hopefully avoid the bad credit effects.

The main source of a credit history and resulting credit score slide could come from not being able to properly manage credit. However, another, more sinister factor could be at work, through hacking into current accounts or the existence of other credit scams.

Credit scams work to cause a slide into bad credit because they can and will affect a credit account holder’s credit history. When somebody steals a credit account holder’s identity or credit card details then uses these to create fraudulent transactions, these transactions will still be recorded in the account holder’s credit history. When these transactions are left unpaid and unresolved, these count as bad transactions, which will serve to deduct points from the credit account holder’s credit score. When the account holder’s credit has taken its share of negative “hits,” he or she may then experience the full force of bad credit effects.

The saddest part about credit scams affecting a credit user’s credit history is that none of the transactions that could have brought about subtractions from the user’s credit score were of the account holder’s doing. These fraudulent transactions are basically crimes committed against the credit account holder. It is sad and alarming, then, that it is the victim who reaps the bad credit effects, while the identity theft criminal could run away laughing.

On the other hand, there is a silver lining to this problem: There is a way to stop the effects of a credit scam from damaging one’s credit even further. And the way to prevent credit scams starts with credit monitoring.

Credit monitoring is a way to be alerted when fraudulent transactions happen. The moment a fraudulent transaction is attempted on the credit account holder’s accounts, the account holder is alerted. He or she can then choose to report the fraud, and even freeze their accounts where applicable.

After the credit account holder has reported the fraud to any or all of the three credit bureaus, he or she can then be able to file for disputes with the sellers or service providers that the ID thieves have transacted with. It will be a long, tedious process, but in time, and with persistence, an ID thief victim’s credit history will get cleared.

No single mom, with all her travails, can afford to be a victim of ID theft. Unfortunately, financial problems are already common for single-income households, and with the blows of ID theft, with its resulting bad credit effects could prove to be even more devastating. So here are some simple, achievable, practical tips on how to prevent credit scam transactions and ID theft:

1. Monitor your accounts daily.

Even though it’s already tough to juggle life as a single mom, make an effort to monitor your credit accounts. The reason is that a single case of identity theft could spiral into months of abuse on your accounts. An identity thief could use and re-use your identity credentials. The more instances that your credentials have been used, the more transactions there will be on your credit history that could send your credit score spiraling downwards towards bad credit.

2. Protect yourself by being extra vigilant.

Gather your mail as soon as you arrive home. Better yet, put your mail where no one else can take it, except for you and your household members. Shred your documents, especially bank and credit card company documents. If you won’t use the pre-approved credit cards that come in, cut them up and shred the letters and envelopes they came with, as well. Mail and trash theft are two of the likely damaging sources of data used in identity theft.

3. Don’t hesitate to use a credit freeze when you need to.

You may put a credit freeze on your accounts anytime any suspicious activity has been detected. If you have no need for credit in the next few months or years, this is a good option. If you actively use your credit accounts, use them wisely and sparingly, to avoid being a victim of ID theft.

Your credit history should be guarded well. It is among your most important data, whether as a single mom or otherwise. The bad credit effects that you reap when you fail to work on preventing credit scams can make a major blow to your finances and you wouldn’t want that happening to you. So be vigilant and work on protecting yourself and your family!

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Guest Post Submission: Joy Mali is an active blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances. She also covers topics on managing bad credit and credit monitoring that can help people manage and protect their credit from theft and fraud.

 

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