My 300th Post and It’s Really Important

by Kevin on September 8, 2008

Last week I ran through my triannual reminder for you to check your credit reports for free. It’s a very simple process and can make a huge difference in your life.

How Credit Reports Protect You

  • Helps protect you from identity theft — if you see accounts open on your report that aren’t yours, you may have become a victim of ID theft
  • Unknown debts — you have a debt that you never received notice of that is pulling down your credit score because you never paid it off
  • Making sure your accounts are in order — if you’ve paid off your credit card balance every single month, and on time, your report should reflect that.

I want to talk about the first two points.

I’ve had two friends of mine be affected by the first two issues in the last month! Naturally, I won’t go into all of the specific, but there are some lessons to learn here.

One friend had two accounts open in his name that he didn’t know about. He caught the problem with Annual Credit Report, got the accounts closed, and placed a freeze on his credit with all three bureaus. Only emotional damage — the accounts were current and he owes no money. Essentially, his identity was stolen by someone.

The other friend is trying to buy a house and had a debt that had been sent to collections that he didn’t know about. One notice was sent to him about the debt last year — to an incorrect address — and it was written off. It’s thrown a kink in his mortgage plans, but I think he’s gotten it taken care of. His score was affected, but he is waiting on a certified letter saying the debt has been paid off so he can update the credit bureaus.

It’s the little things

That’s it, guys. It’s the little things that can trip you up. Checking your credit report is a simple process, but it can have a huge impact on your life.

Paying off debt, spending less than you earn, and saving your money are relatively small steps. They have a huge impact on your life.

This is my 300th post. I’ve been blogging since January, and I’ll tell you, hearing that I had helped two really good friends of mine wth some serious issues is about the best feeling I’ve had associated with this blog. I wish it was something more along the lines of “you helped me earn $1,000,000 in my brokerage account last year”, but you take what you can get. It sucks these things happened to them, but it is better to find out now before serious damage has occured.

What could have happened

Let’s take the above two situations to the next level. What could have happened?

  • Friend doesn’t find out about the identity theft and he finds out about it with a phone call from several creditors asking for thousands of dollars. Pain, stress, and emotional damage follow. He comes out of it clean, but probably spend 20-60 hours of his time proving his innocence.
  • Other friend doesn’t find out about the unknown debt, his credit score is severely affected, and his loan terms either change dramatically or he can’t get the mortgage. He loses the earnest money he put down for the contract.

So let’s be smart, do the little things, and work the plan. I hope there are other people out there that have significant change in their lives from this blog. Keep up the good work, guys.

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September 16, 2008 at 6:29 am
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