How Identity Theft Can Ruin Your Future {and How to Keep Your Finances Safe}

This post is brought to you by Transunion however all opinions are that of Six Dollar Family. For more information, please see our disclosure policy.

We’ve all heard the term identity theft, but for a large majority, it is only a term that we use in passing. It is something that happens to “other people,” and not to our family. Please allow me to be blunt; if you shop online, if you use a debit or credit card; if you use email, or if you are anything other than a fully off-grid homesteader, your credit is at risk of someone coming along, swiping it and ruining your financial future.

It is sometimes not clear exactly how identity theft can ruin your finances. Yes, we know that someone can order things in your name. We know that they can take a loan out in your name and that they can do other things that harm, but have you ever stopped to think about what exactly that means?

How to Protect Yourself from Identity Theft

My husband has personal experience with what it means and please let me tell you that once your identity is stolen, it makes using your credit very difficult. As a child, he had his identity stolen. Yes, as a child. They issued a new Social Security Number to him and it stopped. To this day, we still find the occasional charge from back then. To this day, his credit report is still red flagged. This means that anytime he applies for credit, the process takes considerably longer. It has been more than twenty years and we still deal with the headaches.

Now, put yourself in the place of an identity theft victim. You’re already struggling with your family budget (Six Dollar Family) when suddenly, you’re on the hook for thousands of dollars in product and loans that you didn’t apply for. Yes, there is protection from that, but in the immediate aftermath, it will cause you financial pain that could lead to ruin, unnecessary stress and more. Can you imagine losing your home or car simply because a criminal did something that you were blameless in? I have spoken to people who have had exactly that happen.

You can protect yourself from identity theft though and it is far easier than you might think.

Know what you’re protecting –

It’s hard to protect your identity if you don’t know what hackers are after. They’re after your social security number, your credit, and anything else they can take. As I said earlier, they will open credit cards in your name, take loans out in your name and do anything else they can do to run your credit into the ground. They don’t care about the aftermath. They’re after the immediate reward of money and items. It’s not like they’re going to pay the minimum payment amount on your credit cards once they open them up in your name.

Keep an eye on your credit –

Credit monitoring is simply the act of monitoring your credit meaning that you keep an eye on your credit by checking in every so often. A good credit monitoring system will alert you when credit is opened in your name. When you monitor your credit, you also get a good chance to see what areas need improving and areas that you can work on to improve your credit score. We have worked incredibly hard to rebuild our credit after it was lowered significantly after a financial crisis (Six Dollar Family) in 2014. Making sure that we have a good credit monitoring system set up has only made doing that much easier.

Keep a running list of what credit lines you do have open –

In June of 2016, we had an issue where our debit cards were compromised. It wasn’t anything that we had done personally other than to shop at a large-scale retailer who had their systems hacked. It wasn’t too long after that we began to see small charges pop up that shouldn’t be there. Luckily, I check my bank accounts daily so we noticed them right off the bat. We were lucky in that it was caught early and before too much damage could be done, but if you aren’t aware of what you’re paying for, it could easily be disastrous. For us, they charged around $50.00 to test the number over the course of around 12 hours. The charge amounts? $1.00, $3.00, $9.95 and so on. If we hadn’t been watching? We would have never noticed it.

It is so easy to forget what credit lines you do have open and which ones you have already paid off. Keeping a running list makes things much easier to keep track of and can streamline the process of updating your personal budget each month. It is far easier to check against my list if something new pops up than it is to try and track down where a new charge or account may have come from. If something is there that shouldn’t be, it allows me to get it taken care of much quicker than not having the list would. I also take note if I closed a specific account too since some identity thieves will try and re-open a once closed account hoping to slip in under the radar.

Get proper protection for your identity and credit –

There are a million things you “could do” to protect your identity but they can be time consuming and require immaculate record keeping. For me, aside from what I’ve already mentioned, I use TrueIdentity by TransUnion to help me keep things on track. With the monitoring service, I am instantly notified if there is a new addition to my credit. This helps me to react immediately if I notice that something has shown up that shouldn’t be. This is a fantastic tool that can help you monitor your credit and protect your identity for FREE! TrueIdentity alerts you of changes to your credit report, allows you to lock your credit down and more! It makes monitoring your credit so much easier!

Knowing that you can live your life without worrying about anyone stealing your identity is great. I enjoy knowing I will get an email if anything looks off and knowing that I have a professional team of credit experts backing me?

Well, that just helps me sleep better at night.