One common credit problem that is rarely talked about is when a family member or other loved one ruins your credit by either stealing your identity to breaking their promise to repay debt that you co-signed for or gave them access to. So how can you protect yourself from credit wrecking family and friends?
- Don’t co-sign credit cards or other types of debt. We know it is difficult to say no to a family member or friend who is in a tight situation and needs access to your good credit. However, if this person has not kept their own credit ranking in order, what makes you think they will pay off that credit card or keep up on their car loan payments you co-signed? The truth is that allowing them access to your good credit by co-signing credit cards, car loans or other debts is just a disaster waiting to happen.
- Get a P.O. Box and use it for your financial papers. Let’s be honest, every family member or friend cannot be trusted with your financial information. Don’t take the risk of giving a family member or friend access to your sensitive financial data. Identity theft by loved ones if real and it does happen. If a friend or family member charges up a credit card without your permission, you will either have to report them to the police or the pay the debt. No one wants to be faced with that choice, so keep your financial information out of their reach.
- Check your credit report at least twice a year. If you notice any credit card accounts or other types of debts that you did not open, report this to the credit bureau immediately and call the credit provider immediately so they can close the account. If a credit card account or any other type of debt account was opened without your permission, you will need to immediately contact the police. Failure to contact the police will result in your being held responsible for the repayment of those debts.