Placing a credit freeze on your credit reports can help reduce your risk of identity theft, but sometimes you’ll need to lift the freeze for credit or job applications.

If your identity is stolen, an immediate action plan is essential to try to make yourself — not to mention your finances — whole again. You should probably place a credit freeze on your credit reports right away. And, to help keep your personal information secure, it’s a good idea to leave the freeze in place.

But at some point, you’ll probably want to open a new credit card, finance a car or even apply for a mortgage, which all require a credit check. And if you’re applying for a job, some employers will check your credit as part of the hiring process. In that case, you’ll need to learn how to lift a credit freeze.

• How to lift a credit freeze at each of the three major credit bureaus
• Credit scores vs. credit reports
• Temporary lift vs. permanent lift
• Timing and cost of lifting a credit freeze
• FAQs about unfreezing credit

How to lift a credit freeze at each of the three major credit bureaus

In order to place or remove a credit freeze on your credit reports, you must contact each of the three major credit bureaus (Equifax, Experian and TransUnion) individually. It might be worth asking your potential creditor or employer which bureau it uses for credit checks. That way you’ll only have to lift the freeze with a single bureau instead of all three.

You can request credit freezes and reversals by phone, mail or online. You’ll likely need to provide your name, address, birthdate and Social Security number in order to place a freeze.

Here’s a rundown of how it works at all three major credit bureaus.

How to unfreeze credit with Equifax

A credit freeze can be added, temporarily lifted or permanently removed by creating an account on myEquifax. This account is a one-stop shop to monitor the status of your credit report.

Here’s how to contact Equifax.

• Phone: 1-888-298-0045
• Mail: Equifax Information Services LLC, P.O. Box 105788 Atlanta, GA 30348-5788
• Website: equifax.com/personal/credit-report-services/

How to unfreeze credit with Experian

Experian guides its customers to use its online Freeze Center to make changes to their credit file. A credit freeze can also be lifted by phone or mail.

Here’s how to contact Experian.

• Phone: 1-888-397-3742
• Mail: Experian Security Freeze, P.O. Box 9554, Allen, TX 75013
• Website: experian.com/freeze/center.html

How to unfreeze credit with TransUnion

TransUnion offers customers an online account to make changes to a credit freeze. You can also make changes through TransUnion’s mobile app, myTransUnion.

TransUnion allows you to schedule a credit freeze lift up to 15 days in advance.

Here’s how to contact TransUnion.

• Phone: 800-916-8800
• Mail: TransUnion, P.O. Box 160, Woodlyn, PA 19094
• Website: transunion.com/credit-freeze

Credit scores vs. credit reports

It’s important to note that a credit freeze only limits access to your credit reports — not your credit scores. You’ll still be able to access your scores without lifting the freeze, but you likely won’t be able to open any new accounts. Most creditors need access to your reports before giving you a line of credit.

Temporary lift vs. permanent lift

When lifting a credit freeze, you have a choice between a temporary lift and a permanent lift.

A temporary lift allows creditors or companies access to your credit reports within a specific date range, determined by you. This option is likely the smarter choice because you can set it and forget it. Once the temporary lift expires, the credit freeze is reinstituted without your having to do a thing, which can help keep you protected.

A permanent lift is a little bit of a bigger deal. Your once-frozen and secure credit reports are now more vulnerable. With the option of a temporary lift available, a permanent removal is not recommended if you have any reason to be concerned about the security of your information.

Timing and cost of lifting a credit freeze

The Fair Credit Reporting Act requires that both freezing your credit and lifting a freeze be free.

In terms of timing, a credit freeze must be removed no later than one hour after a credit bureau receives your request by phone or online. If you mail in a request to have a freeze lifted, credit bureaus have three business days after receiving it to lift the credit freeze.

FAQs about unfreezing credit

What’s next?

If you know which credit bureau the company plans to run your credit through, you can save yourself time by lifting the freeze at that particular credit bureau rather than at all three. Not sure which credit bureau a certain creditor uses? Simply ask — creditors may be able to share that information with you. After all, they want your business!

Even if your credit is frozen, it’s always a good idea to continuously monitor your credit reports for unusual activity. You can brush up on signs of identity theft here.

It’s also good to know the differences between a credit freeze, credit lock and fraud alert so that you can be more prepared if you need to freeze you credit or remove a credit freeze in the future.

The first step: Go to the FTC’s IdentityTheft.gov site and choose the “Get Started” tab.

Every identity theft case is unique — the one similarity being that the victim feels violated and frustrated. But no matter how complex your identity theft case might be, the sooner the recovery process starts, the sooner you can get your life back.

• What is an identity theft affidavit?
• When should you submit an identity theft affidavit?
• Why the identity theft affidavit is important

What is an identity theft affidavit?

As scary as data breaches are, and as intimidating as it may seem to deal with identity theft, the truth is that the recovery process can be very doable. It just takes some legwork and diligence.

The FTC set up a one-stop shop at IdentityTheft.gov to help. This website provides guidance and specific recovery plans based on the unique circumstances of different types of identity theft.

Included is an identity theft affidavit, or identity theft report form. Once this report is completed, the victim can submit it to entities where the fraudulent activity occurred.

When should you submit an identity theft affidavit?

You should fill out the FTC’s online form if and whenever you learn that you’ve been a victim of identity theft.

The IRS has its own identity theft affidavit to complete if your identity — specifically your Social Security number — is used to file a fraudulent federal tax return. It’s known as IRS Form 14039. Keep in mind that identity theft victims can complete this form as a preventive measure if they don’t know whether someone used their information to file a tax return but they know they’re a victim of identity theft.

Why the identity theft affidavit is important

For identity theft victims, the primary goal is to reclaim their identities and reduce their risk of future victimization. The identity theft affidavit can help because …

• It attests to the fact that the identity theft happened.
• It can serve to flag current fraud and reduce the risk of future fraud.
• It can help in the effort to alleviate the victim of responsibility for debts that resulted from fraudulent activity.
• It can help with disputing any errors on the victim’s credit reports.

There are many websites and resources focused on the identity theft recovery process. To be on the safe side, and to make sure the information you are receiving is accurate, we recommend utilizing government agency websites, which commonly end in .gov.

Here are a few to get you started.

Bottom line

Completing the FTC’s identity theft recovery plan is a critical step in the identity theft recovery process. Not only does it help you document the identity theft incident, it can help the victim avoid liability for debt sustained from the fraudulent activity.

When federal tax returns are filed fraudulently, the IRS’ Identity Theft Affidavit (Form 14039) should be completed.

If you know you’ve been a victim of identity theft but aren’t sure how to cover your bases, complete both the IRS and FTC forms. You can never have too much documentation or take too much precaution when you’re the victim of identity theft.

At first glance, you may be inclined to think of a creditor as only a bank or credit card company, but a creditor can be anyone that you owe an outstanding balance to.

• What is a creditor?
• Examples of common creditors
• Examples of common debts
• How creditors make money

What is a creditor?

The term creditor can mean different things depending on the situation, but it typically means a financial institution or person who is owed money.

If you’re the person who owes the money to a creditor, you may be referred to as a debtor or borrower.

Once a borrower and lender agree on terms for financing and sign a loan agreement, they’re entering into a contract. That contract often specifies the repayment agreement terms of the loan and the expected payment amounts.

You may hear the terms lender and creditor used interchangeably. The same goes for borrower and debtor. But you’ll more likely hear creditor and debtor used during legal proceedings where a creditor is trying to collect on an outstanding balance, such as during a bankruptcy case.

Ultimately, if a debtor can’t repay the funds borrowed, the creditor typically has the right to attempt recovery of what is owed, which is when repossession, foreclosure and debt collectors can come into play.

Examples of common creditors

There are several types of creditors, such as real creditors, personal creditors, secured creditors and unsecured creditors.

Real creditors: A real creditor is a financial institution, such as a bank or credit card issuer, that has a right to be repaid.

Personal creditors: These are friends or family you owe money.

Secured creditors: These lenders have a legal right — often through a lien — to property you used as collateral to secure the loan.

Unsecured creditors: A credit card issuer is a good example of this type of creditor. You may owe money, but it’s unsecured debt, meaning you haven’t agreed to give the creditor any property — such as a car or home — as collateral to secure your debt.

Examples of common debts

• Mortgage: A mortgage is a loan you take out from a financial institution to purchase a house. In this case, the creditor would be the financial institution that provides the borrower with the mortgage loan.
• Auto loans: Similar to a mortgage, an auto loan is a loan that someone takes out in order to purchase a vehicle.
• Student loans: Students who cannot afford the cost of tuition on their own can apply for financial aid, including student loans to cover expenses such as tuition, housing and books. When the time comes to repay the student loan, payments are made to the creditor.
• Credit cards: Credit cards offer a revolving credit line with a specified credit limit. The credit card issuer that extended the credit line could be the creditor if you have an outstanding balance.
• Personal loans: A personal loan is a loan — often unsecured — that can help you pay for a big project like home improvements or to consolidate debt. If you have an outstanding balance on the personal loan, the creditor is likely the lender that issued the loan.

How creditors make money

One way creditors can make money is by charging interest on the credit they extend. A creditor can often make money through fees, like late payment fees, which may be applied if a payment is received after the agreed-upon due date.

The creditor may be taking a risk when extending credit to an approved borrower. If a debt can’t be repaid, the creditor may have no recourse other than to make a legal claim in court or to hire a debt collection agency to try to recover the money.

Depending on the terms of the agreement, the creditor may be able to repossess an asset used as collateral (like a car), garnish a debtor’s wages, or try to get at least partial payment from the debtor through a court order if the debtor is unable to repay as agreed.

What’s next

A creditor is essentially a person or financial institution you owe money to. If you owe money, you may be referred to as a debtor.

If you ever come across these terms, make sure to read the fine print to understand how they are being used. Having a general definition can hopefully help you cut through some of the jargon to better understand some of the financial advice that comes with applying for credit.

An overdraft is when you don’t have enough money in your checking account to pay for a purchase, but your bank or credit union covers the payment anyway. When that happens, the bank often charges you a fee and makes you pay back the overdrafted amount — this is overdraft protection.

Let’s face it — anyone can make an honest mistake. We may forget to make a deposit or forget that we paid for a particular item. There are a number of reasons why bank account holders may make a miscalculation or minor budget oversight — even for the most financially savvy among us.

Overdrawn accounts can incur hefty overdraft fees, sometimes adding on to an already-burdened consumer’s debt load. Overdraft protection is a financial safety net for checking account holders — but it might not be the best option for everyone.

• The fundamentals
• The fees
• Does everyone need overdraft protection?
• How to avoid overdraft fees

The fundamentals

Although financial institutions operate independently from one another, offering some sort of overdraft protection is routine. As a checking account holder, you can add or remove overdraft protection during the life of your account. When signing up for overdraft protection, you will need to link at least one backup account (like a savings account or credit card) to your checking account. If the checking account does not have the funds to cover a transaction, then funds are automatically pulled from one of the linked accounts to cover the amount.

The fees

Naturally, this safety net comes with a cost. Most overdraft protection fees generally average at about $12. Mind you, this minimal price seems rather reasonable when compared to the average $34 overdraft fee, which can be charged per transaction.

Eligible linked accounts may also have additional fees that vary according to the amount advanced to cover the transactions. For a complete understanding of these fees, the amounts and when they may be charged to your account, make sure to read the fine print of your credit card’s agreement and terms policy before opting in to overdraft protection.

Does everyone need overdraft protection?

The short answer is “no,” but, of course, a simple answer like that won’t cut it when dealing with finances.

Overdraft protection can be beneficial for new account holders, such as students who are on a budget and learning to responsibly manage their money — or for those who rely on payday to replenish their accounts.

Signing up for overdraft protection can spare the embarrassment of a declined purchase, and it can also help to cover an emergency purchase when in a pinch. Of course, remember that each overdraft is essentially an expensive loan from the bank when you add in the fees. Try your best to avoid them if at all possible.

Feel as if overdraft protection isn’t for you? No problem! Many banks offer accounts that allow the account holder to opt out or decline all overdraft protection services. If an account does not have the means to cover a transaction such as a debit purchase, ATM withdrawal or electronic payment, the transaction will be declined or the item will be returned. Opting out of overdraft protection is a sure way to avoid any overdraft fees from the bank, although be wary that other fees could be applied.

Can my bank automatically enroll my account in overdraft protection?

No. Under the Overdraft Protection Act, banks can no longer automatically enroll customers in overdraft coverage or protection; the customer makes the ultimate decision.

How to avoid overdraft fees

Let’s be honest — the banking industry is a business focused on making money, and one way of doing that is by charging their customers various fees. Although some fees are unavoidable, account holders can avoid most fees and keep their hard-earned dollars for themselves.

• Sign up for account alerts, such as payment reminders and low-balance alerts
• Frequently monitor your account for unusual activity or spending
• Keep some extra cash in the checking account, if possible, to avoid a low balance
• Sign up for account services that automatically replenish a low-balance account
• Opt out of any overdraft protection services

Before signing up for a checking account, do some research and read the bank’s fine print on its fees. Some banks, such as Wells Fargo, may offer to have overdraft fees waived if the full amount is deposited into the account by a specified time on the same business day.

Whenever there is a fee charged to your account, call a customer service representative and ask to have the fee waived. An appeal to a customer service representative could be successful. It’s worth a shot, isn’t it?

Next steps

Adding overdraft protection to an account is a practical and relatively inexpensive safeguard against potentially hefty overdraft fees. Before adding this optional protection to an account, you should scrutinize your spending habits and account management skills to determine if you truly need this added protection. Overdraft protection isn’t necessary for everyone.

If you tend to keep a low balance in your checking account and don’t keep a close eye on spending habits, then overdraft protection could be for you. If you’re fortunate enough to keep a cushion of cash in your checking account and make it a point to routinely monitor your account, then overdraft protection may not be necessary. If you’re on the fence, remember that nothing is set in stone; overdraft protection can be added or removed from your account.

If you’ve ever had the dubious pleasure of being charged an overdraft fee on your checking account, you can understand how American consumers pay roughly $7.7 billion annually in overdraft fees and nonsufficient funds fees combined, according to the Consumer Financial Protection Bureau.

If you’ve opted into overdraft protection service with your bank, you’ll get hit with an overdraft fee whenever there isn’t enough money in your checking account to cover a transaction, like a debit card purchase or ATM withdrawal. Even though you don’t have the funds in your account, the bank can allow the transaction and cover the amount needed. In effect, the bank makes a loan to your account in the amount of the overdraft, which puts your account into the red. But banks can charge hefty fees, referred to as overdraft fees, for the service. An overdraft fee is generally a fixed amount and usually in the ballpark of $35 per transaction on top of repaying the bank, which can leave quite a dent if you have multiple overdraft transactions.

On a positive note, by following some simple strategies, account holders shouldn’t have to worry about looming overdraft fees.

1. Opt out of overdraft protection plans
2. Link additional accounts to cover any shortfalls
3. Monitor accounts regularly and sign up for account alerts
4. Create a buffer of available cash
5. Understand your balance versus your purchases

1. Opt out of overdraft protection plans

Banks may be quick to enroll you in an overdraft protection plan by rationalizing that they only have your best financial interests in mind. But these plans can be costly for you and are not necessary for everyone. Most importantly, remember that overdraft protection plans are optional.

When you’re not covered by an overdraft protection plan, debit purchases or ATM withdrawals from an account with insufficient funds will simply be declined. Keep in mind though, that banks can also charge a fee for declined purchases on accounts with insufficient funds — a fee that can be just as costly as overdraft fees. Before enrolling, read the fine print for your overdraft protection program to understand all of the fees associated with the plan. And while you’re at it, read through your checking account agreement to find out if your bank or credit union charges non-sufficient funds fees.

2. Link additional accounts to cover any shortfalls

There are other methods to help you avoid steep overdraft fees. Some banks’ overdraft protection plans allow account holders to link a savings account or credit card to transfer money to cover any shortfalls. This way, instead of incurring steep overdraft fees for having insufficient funds to cover a transaction, enough money will automatically transfer from your linked account or credit card to complete the transaction.

This safety net doesn’t necessarily come free, though. There may be a related transfer fee, and if a credit card is linked, then interest can accrue on top of the transfer fee. But this fee is typically much lower than the average overdraft fee. As always, before enrolling in or opting out, make sure to do your research on the details of the plans your bank offers.

3. Monitor accounts regularly and sign up for account alerts

The days of banking at branches only from 8 a.m. to 5 p.m. on weekdays are over. Whether you receive monthly bank statements in the mail or bank online, it’s key to routinely monitor your account and your balances if you want to avoid overdraft or nonsufficient funds fees. With the sheer convenience of modern banking, routine balance checks are easy and essential.

Be sure to monitor debit card purchases, ATM withdrawals, written checks and any automatic bill payments you’ve set up. Most banks offer alerts, including low-balance alerts that allow you to receive text messages or emails when you hit a predetermined low-balance threshold. And with most major banks offering mobile apps, access to your finances is literally just a thumbprint away.

4. Create a buffer of available cash

If you have room in your budget, keep extra money in your account to cover miscalculations, or forgotten or delayed transactions, to act as a shield against overdraft and nonsufficient funds fees. Keeping your own personal minimum account balance, if you can manage it, is a good way to avoid most overdraft fees.

5. Understand your balance versus your purchases

It’s one thing to know your account balance and it’s another to know how your purchases affect your account balance. Not every transaction is deducted the same way. For instance, checks can be cashed days, or even weeks, after being written, but automatic bill pay can be scheduled for any day you choose. Items purchased online can be deducted from the account either on the day of purchase or the day the item is actually shipped. It’s never a bad idea to keep track of your transaction history on your own, instead of relying on your bank’s updates.

Bottom line

Avoiding overdraft fees doesn’t have to be complicated. You can achieve it for any budget or account balance. While your bank may offer you an overdraft protection plan, make sure the plan really protects you and your wallet.

Nominal precautions — routinely monitoring your account balances, setting up account alerts and maintaining a cash safety net in the account — can all help avoid unwelcome fees. Be aware of your own spending habits and know how to budget all your transactions so as not to be in the red. Empower yourself to make well-informed financial decisions so that overdraft fees will never be a part of your financial portfolio.

When money is needed in a pinch or to help pay for that big-ticket item, a common financial move is to get a loan.

Mortgage loans, auto loans and student loans are pretty well understood — it’s fairly self-evident what they are used for. But what about another common type of loan: personal loans?

The great thing about personal loans is that they can be used for a wide range of purposes for nearly anything you need. A personal loan can be used for a home renovation project or auto repair, to help consolidate debt or to cover an unplanned cost. Ideally, personal loans are best used for a fixed amount of money, not for an ongoing expense with an open-ended total.

What is a personal loan?

A personal loan is a predetermined amount of money borrowed from a lender — usually a bank, credit union or online lender. Personal loans are typically unsecured, meaning they are not backed by collateral, making the loan approval heavily dependent on the borrower’s credit scores and credit reports.

For budget-conscious borrowers, personal loans can be more manageable than other forms of credit because they can have fixed interest rates, fixed terms and fixed payments.

• Fixed interest rates. The interest rate that is set when the loan is granted is the interest rate for the life of the loan. Rates vary from lender to lender and from borrower to borrower. Rates currently range anywhere from an APR, or annual percentage rate, of around 5% or 6% on the low end to nearly 36% on the high end.
• Fixed terms. The set period of time the borrower has to pay off the loan can vary, but in many cases it runs three to five years. The loan term is usually described in months.
• Fixed payments. With an interest rate and other loan terms that are fixed, the monthly payments are also fixed. This means payments will not fluctuate, therefore lowering the chances of any surprise increase.

Applying for a personal loan

Much like any financial decision, your choice of lender and loan amount should not be made on a whim. When applying for a personal loan, shop around — rates and terms will vary. Pay attention to these tips when comparing lenders for the personal loan that best fits your situation.

• Have all your required documents handy. When applying for a loan, the following information may be required: personal contact information; date of birth; Social Security number; employment and income information, including recent paystubs or W-2 tax forms; and loan amount needed.
• Know your borrowing needs. You know your financial responsibilities and budget better than anyone. Have a game plan before applying for a loan, and know exactly how much you need and how long you will realistically need to repay it. Personal loans can range from $2,000 to $50,000 — or even up to $100,000.
• Make sure your credit is in good shape. A borrower’s credit risk is determined by a number of factors. Lenders can consider your current credit scores, credit reports, income, debt-to-income ratio and overall financial situation.
• Take note of any fees or penalties. Normally, personal loans come with certain fees, like origination fees and prepayment penalty fees. The origination fee, charged by the lender to process the application and disburse the funds, is usually a percentage of the loan amount or a flat rate set by a specific lender. Prepayment penalties occur when the borrower wants to pay off the loan before the set terms of the loan. Since these fees are not charged by all lenders and vary in cost, be sure to ask upfront about any fees or penalties tied to the loan. 

When to get a personal loan

A personal loan is an option to explore when you need money to cover a certain expense. Borrowing money, no matter the amount, is an obligation that can work to your benefit if treated responsibly — or it can put you in serious financial trouble should you not repay the loan according to the loan’s terms. Before deciding to sign your name on that dotted line for approval, make sure this is the right financial choice for you. 

Good reasons to apply for a personal loan

• The loan is needed for a fixed amount of money.
• You can consolidate your debt from multiple payments with varying interest rates into one monthly payment, at a lower interest rate.
• You have reviewed your credit history and credit scores to get an idea of whether you meet the minimum requirements for a loan with a reasonable interest rate.
• All fees and penalties associated with the lender have been considered and are budgeted for.
• You have stable employment with a steady income to sustain the monthly payments and can repay the loan according to the selected terms.

Reasons for a personal loan that aren’t so good 

• The money is needed for a splurge purchase or the total amount needed is unknown.
• You are rushing to get a loan when you have bad credit. Bad credit can make personal loans costly and difficult to be approved for. Look into other options or even rebuilding your credit before taking next steps.
• The lender is not transparent with its fees and penalties and is willing to approve you for more than you need or can afford.
• The monthly payment for the loan will be a struggle to cover and most likely will not be paid off within the terms of the loan. 
  

Bottom line

Personal loans can be great to have in your financial toolbox, but you need to be careful. They offer many advantages for approved borrowers, yet can be an unfavorable and costly option for those who make hasty decisions.

It’s important to keep in mind that all loans need to be paid back, generally with interest. The amount borrowed, interest rate, terms of the loan, and any fees and penalties all need to be reviewed before taking out a personal loan. Even if you need the money in a hurry, explore all your loan options and choose the lender wisely.

The Fair Debt Collection Practices Act, or FDCPA, is a federal law enacted in 1978 that outlines a number of your rights as a consumer when debt collectors try to collect certain types of debt.

When it comes to managing debt collectors, knowledge is your best defense. Read on to arm yourself with facts about the FDCPA and your rights as a consumer so that you can combat a debt collector’s bothersome — and sometimes illegal — collection tactics.

• When, where and with whom communication is permitted
• Mandatory practices
• Prohibited practices

When, where and with whom communication is permitted

• When: Collectors can’t contact you at an unusual time or place that they know would be inconvenient to you. They are specifically restricted from contacting you before 8 a.m. and after 9 p.m., unless they get permission from you or a court.
• Where: If collectors are notified or otherwise have reason to know that they are not to contact you at your place of employment, then they’re restricted from doing so.
• Whom: If debt collectors know that you have retained an attorney to handle your debt, then they’re only allowed to communicate through your attorney — as long as the debt collector can easily get the attorney’s contact info and the attorney responds. Your attorney can also give a debt collector permission to continue contacting you.

Also, debt collectors may not harass third-party contacts in an attempt to settle your debt. The only parties allowed to receive contact are the consumer themselves, the consumer’s attorney, the creditor, the creditor’s attorney, the debt collector’s attorney and sometimes consumer-reporting agencies (depending on your local laws).

As the consumer, you can refuse to pay the debt or ask that the debt collector stop contacting you. If you choose to go this route, you must respond to the debt collector in writing with your request to stop being contacted regarding the debt.

Under the terms of the Fair Debt Collection Practices Act, the collector has to stop contacting you, with two exceptions. For one, debt collectors have to tell you that they received your letter and won’t be contacting you again. They also can notify you if they take additional measures within the bounds of the law to collect the debt, such as filing a lawsuit against you.

One thing to remember: Acting to stop a collector from communicating with you doesn’t prevent the collector from suing you or reporting your debt to credit bureaus.

Mandatory practices

Any debt collector who contacts you for payment must share with you certain information about the debt. If collectors don’t give you this information when they first contact you, then they must submit the information to you in writing within five days of the initial contact. Here’s the info they’re required to give you:

• The name of the creditor.
• The amount owed to the creditor.
• That you have the right to dispute the debt in writing within 30 days of the debt collector’s initial communication. If you dispute the debt, the debt collector is required to send verification of the debt or a copy of any judgment.
• That you can request the name and address of the original creditor, if different from the current creditor.

If you make the written request within 30 days, the debt collector can’t contact you again until they’ve provided you with verification of the debt. This gives you a break from calls and can also allow you time to compare your records with the creditor’s or consult an attorney for legal guidance.

Prohibited practices

There are some things that debt collectors aren’t allowed to do at all.

• Harassment or abusive practices — Debt collectors can’t intimidate you with physical violence, use obscene or offensive language, threaten to defame you to coerce payment, or repeatedly call or harass you or make contact without identifying who they are.
• False or misleading practices — Debt collectors may not falsely represent themselves as anyone else, misrepresent the amount due to the consumer, lie to coerce payment, or provide any false documents to the consumer.
• Unfair practices — Debt collectors may not collect any unauthorized fees, solicit a postdated check to intimidate a consumer, threaten to deposit a postdated check before the date on the check, or threaten repossession without the legal means to do so.

This article only scratches the surface of the Fair Debt Collection Practices Act and its federal protections for consumers. Take time to review the full act — or seek legal advice if legal mumbo-jumbo is not your strong suit. The FDCPA is important, and you need to be familiar with its provisions to avoid making impulsive or pressured decisions.

Bottom line

Without question, non-stop calls from debt collectors are unwanted. Avoiding debt should always be a top goal. But if you find yourself in a financial bind and have debt collectors contacting you, you need to know your rights as a consumer under the Fair Debt Collection Practices Act.

Remember, collectors have limits on their communications with you, and they cannot use threatening or offensive practices or provide erroneous information to pressure a payment. If you feel you’ve been mistreated by debt collectors and believe they may be in violation of the FDCPA, contact the Consumer Financial Protection Bureau, the Federal Trade Commission or your state’s attorney general.

A data breach occurs when private, personal information is stolen or illegally viewed. Computer-savvy thieves want as many identities as they can get their hands on to use your info for their benefit.

If your information has been hacked in a public data breach, you’re not alone. Here are some major data breaches that have made headlines:

• The Home Depot breach, reported in 2014, affected more than 50 million cardholders
• Retail giant Target had almost 40 million compromised accounts from its point-of-sale terminals in 2013
• In 2013, Yahoo reported a breach whose scale was eventually acknowledged to affect 3 billion accounts
• Equifax, which is one of the three major consumer credit bureaus, reported that 147.9 million U.S. consumers were affected by its 2017 data breach

So now the question is: What do you do if you get a notification saying that your personally identifiable information has possibly been exposed in a public data breach? Here are some pointers.

• Read the notice you receive — in its entirety
• Protect your usernames and passwords
• Review your bank and credit card accounts
• Safeguard your Social Security number
• Sign up for a credit-monitoring service

Read the notice you receive — in its entirety

Legislation has been enacted on a state-by-state basis requiring private or governmental organizations to notify affected consumers when a data breach occurs. The laws vary by state, so the requirements for what the notification says and when it must be sent vary.

Either way, it’s important for you to actually read what is sent to you. Your plan of action will depend on what type of information has been compromised

Protect your usernames and passwords

Your unique usernames and passwords are generally considered PII. Should you be notified that these may have been compromised during a breach, consider activating two-factor authentication if possible.

Change both your username and password as soon as you can — even if you don’t know which one may have been compromised. Remember, your account is only as safe as the strength of your password.

Review your bank and credit card accounts

With the convenience of online banking and mobile phone apps, reviewing bank statements and transactions has never been easier. If you suspect that a specific account has been compromised, you need to vigilantly review each and every transaction to make sure there are no unauthorized charges. If you do discover unauthorized charges to your account, immediately report the fraudulent activity to the bank, so as to not be held liable.

First, make sure to contact your financial institution and notify it of the situation. Depending on the severity of the breach and what accounts were compromised, it may be best to close the account or card and open a new one.

How long do I have to report unauthorized charges on my credit card or bank account?

Under the Fair Credit Billing Act, credit card companies can’t charge you more than $50 for unauthorized card purchases. When it comes to debit cards, ATM charges and bank transfers, there are various time limits to be aware of.

If you report the problem before any fraudulent charges are made, you can’t be charged anything. If you report within two business days after you find out about the loss or theft, your liability is limited to $50. If it’s more than two business days but less than 60 calendar days after you receive your statement, you’re on the hook for up to $500. After 60 calendar days, you may not get reimbursed at all.

Safeguard your Social Security number

A data breach exposing Social Security numbers can be extremely harmful to consumers. A compromised Social Security number can not only affect victims in the here and now, but can also affect them for years to come.

Check all of your credit reports. The Fair Credit Reporting Act requires that each of the three major consumer credit bureaus provide consumers a free copy of their credit report every 12 months. (Hint: Play your cards right and request a credit report from a different credit bureau every four months to better monitor your accounts throughout the year.) As you receive each credit report, thoroughly scrutinize each listed account. Pay particular attention to any new accounts opened or hard inquiries made within the time frame of the data breach you were informed about.

Even if your Social Security number is compromised, there are built-in protections for this situation. Consumers can request that a fraud alert or credit freeze be added to their credit files:

• To request a fraud alert, only one of the three major credit bureaus (Equifax, Experian or TransUnion) needs to be notified. As soon as one bureau receives the alert, it is responsible for notifying the others that an alert needs to be placed. Here’s how to contact each major credit bureau.
• When you institute a credit freeze, it restricts access to your credit report and prevents credit card issuers or other lenders from accessing your report.

Both fraud alerts and credit freezes are free to add to a credit file. Carefully explore each option to decide which works best for you.

One other thing to watch out for: If thieves steal your Social Security number, they can file a tax return in your name and potentially receive any refund you have due. Consider filing Form 14039 if you have reason to believe you’ve been a victim of tax fraud or if the IRS sends you a letter directing you to complete the form.

Sign up for a credit-monitoring service

Many companies victimized by a data breach will offer credit-monitoring services at no cost to those affected. Take advantage of this offer. Even when the services are not offered, it would be wise to sign up for a monitoring service, like the free credit-monitoring service offered by Credit Karma, which notifies you of important changes on your TransUnion or Equifax credit reports so you can check for suspicious activity.

Bottom line

A data breach doesn’t have to mean your personally identifiable information is gone forever. With some research and consideration, you can discover ample resources for the taking.

You should always take any notification of a data breach seriously, routinely monitor your accounts for unauthorized charges, and request a copy of your credit reports at least quarterly. You should also consider adding a fraud alert or credit freeze to your credit files, as well as use a credit-monitoring service from here on out.

Whether you are evaluating your investments or calculating your overall financial situation, liquidity is important to understand.

Simply put, liquidity refers to how quickly you can convert something to cash and still maintain its value.

Assets can be bought or sold, either as short-term or long-term investments. The level of liquidity of any particular asset depends entirely on how quickly it can be sold and converted to cash of equal value. An asset that takes longer to sell and for less than full face value is considered less liquid (also referred to as illiquid).

Read on for examples of assets and their level of liquidity.

Liquidity and assets

The asset classes below are organized from most liquid to least liquid.

Cash

Cold hard cash is the most-liquid asset. Cash does not require any type of conversion and maintains its value. It’s wise to have cash available as an emergency fund, because you almost always have access to it when you need it, without waiting. An example of liquid cash is a savings account where funds can be easily withdrawn — whether from a local bank or ATM. Checking and money market accounts also permit easy access to your funds.

Securities

Securities are assets like stocks, bonds and treasury notes that can easily be converted into cash. But how quickly you can sell the security — and how much you lose in value — can vary based on the security.

For example, if it’s a marketable stock, sold on a main exchange such as the New York Stock Exchange, you may be able to sell quickly without taking a hit. But if the stock isn’t as marketable, it could take time to sell and you could take a bigger loss.

Fixed assets

Fixed assets are longer-term or permanent investments — things like vehicles and real estate — that make more sense to use or hold onto for a while before converting them into cash. Fixed assets are considered less liquid.

Think about it this way: If you need to sell a house quickly, you may have to accept less money for it than if you were able to wait for the right person to come along and pay the full value. That’s why it’s considered  a fixed — or less liquid — asset.

A word on diversification

We have all heard the saying, “Don’t put all your eggs in one basket.” This also applies to the three major liquidity-of-asset classes: cash, securities and fixed.

In fact, while investment portfolios should be unique to each individual, the Securities and Exchange Commission emphasizes a big rule of thumb for everyone: having a diverse set of assets. That’s because, historically, the returns of the three major types of assets don’t move in lock-step. In fact, market conditions that are good for one type of asset are often bad for another. Having diverse assets can help protect individuals from significant losses across the board if something catastrophic happens in the market.

Investing in more than one type of asset also broadens a person’s options in case there’s a need for immediate cash.

Bottom line

Understanding your financial assets and their levels of liquidity is important. Life is long — and it can throw you financial curveballs. Investing in all sorts of asset classes may help keep your finances more stable, whatever comes your way.

Foreclosure can be one of the scariest prospects a homeowner may face. Just the possibility can send homeowners looking for any way to save their homes.

Bankruptcy is often seen as a last resort for people in heavy debt beyond their means, and certain portions of the bankruptcy code can look like lifelines to homeowners hoping to avoid the painful process of foreclosure. While the purpose of Chapter 7 is to provide a way for people to sell their assets to get out from under debt, Chapter 13 bankruptcy is designed as a pathway to keep your property for the long term by way of a repayment plan.

So it’s important to know that bankruptcy is anything but a quick fix — it’s a serious process full of complicated legal requirements and eligibility standards, long-lasting negative consequences for credit profiles, and potential multiyear commitments to paying off debts falling under the filing.

If you’re considering using bankruptcy to help keep your home, then you should have a clear sense of what you’re getting into before filing. In this article, we’ll run down some of the key ways to stay in your home through bankruptcy and a few reasons you may not want to put yourself through the process.

• Keeping your house in Chapter 13 bankruptcy
• Bankruptcy’s ‘automatic stay’ provision
• The long-term effects of Chapter 13 bankruptcy on credit

Keeping your house in Chapter 13 bankruptcy

Bankruptcy can bring up visions of lost assets, including a “SOLD” sign plastered on your beloved home. Under the provisions of Chapter 13 bankruptcy though, this fear doesn’t have to come true.

Chapter 13, commonly referred to as the “wage earner’s plan,” can be a wise choice for people who find themselves under a mountain of debt but still have steady income. Unlike Chapter 7 bankruptcy, in which eligible assets can be sold off to settle debt, Chapter 13 allows debtors to propose a repayment plan — typically three to five years — depending on income level. If debtors follow the plan and all conditions are met, they receive a discharge of the debts included in the plan.

Crucially, a Chapter 13 bankruptcy could also end with the debtor’s homeownership intact.

The repayment plan can incorporate missed mortgage payments, allowing homeowners to become current with their lender. However, the plan does not release the debtor from the established mortgage payment schedule — the debtor must still make those monthly payments during the repayment plan.

Bankruptcy’s ‘automatic stay’ provision

Regardless of your ability to obtain a discharge through Chapter 13 bankruptcy, filing presses the pause button on the foreclosure process via the “automatic stay” provision. This protection generally allows the debtor a break from persistent communication and collection efforts from most creditors, including mortgage lenders. The foreclosure process won’t stop completely, but the automatic stay will create a little breathing room until a repayment plan is scheduled and accepted by the court.

But the key phrase there is “a little breathing room” — the automatic stay provision is not a fail-safe to keeping your home. For one thing, it can’t reverse portions of the foreclosure process that have already been completed. If the mortgage lender has completed the foreclosure sale prior to the bankruptcy being filed, then the house can still go into foreclosure auction.

The automatic stay also doesn’t protect you from the consequences of missing new mortgage payments during the Chapter 13 repayment period. If those payments are missed, then the lender can petition to proceed with the foreclosure process.

The automatic stay provision in Chapter 7 bankruptcy

The automatic stay can also provide some relief in a Chapter 7 bankruptcy, although it may not allow you to stay in your home after the bankruptcy. In Chapter 7, the debtor’s eligible assets are sold in order to pay back creditors. A house is likely to be included in that sale if it’s worth enough to cover eligible debts, but the automatic stay could provide the opportunity to remain in your home until that time — allowing you the chance to make other living arrangements during this monthslong bankruptcy process.

The long-term effects of Chapter 13 bankruptcy on credit

While these Chapter 13 bankruptcy provisions can provide help to some people staring down foreclosure, they are anything but a simple solution to the problem. Any bankruptcy carries major risks and long-term consequences. Even a successful bankruptcy will have lingering effects.

One of the most measurable and immediate effects to consider is what bankruptcy does to credit scores. In most cases, a Chapter 13 bankruptcy stays on your credit reports for seven years (three years less than a Chapter 7 bankruptcy) and is considered an especially negative event for most credit-scoring models.

Lenders will ultimately consider more than just scores when assessing whether to approve a potential borrower, but a major derogatory mark like a bankruptcy can affect your ability to obtain new credit cards, loans, and the kinds of interest rates and other terms you’ll get on those products. That includes any mortgages (including refinances) you hope to get in the future.

Lenders could be hesitant to approve long-term, high-dollar loans and could choose to decline such applications. Even if the application is approved, you can expect the loan to be at a very high interest rate and require a higher down payment and higher closing costs than would have been otherwise. With a bankruptcy on your record, you’re more likely to be identified as a high-risk borrower.

On the other hand, a foreclosure also has a negative impact on credit. It will also stay on your report for seven years, and its effect on scores is often only slightly less negative than that of a bankruptcy. That means you could experience similar trouble finding new loans and getting favorable terms when you do.

Bottom line

Both the effects and value of a bankruptcy or foreclosure depend heavily on individual circumstances, so we suggest you speak with a qualified financial adviser or bankruptcy lawyer before making any decisions about the best path for you. These professionals should be able to assess your unique situation and provide the most-appropriate advice.

Even before speaking with an expert though, it’s probably worth considering just how important it is to you to hold onto your home. Neither a foreclosure nor a bankruptcy is a great option, but the best option for you could hinge on your ultimate goal.

If you can’t imagine leaving your home, then your options may be limited. But a willingness to live elsewhere could open up a few other paths, including filing for Chapter 7 bankruptcy or accepting foreclosure.

A chargeback is a dispute of a purchase that has already been charged to an account that can result in a return of funds.

You may be thinking this is the same as a refund, but there’s a difference. A refund is paid directly from the merchant — but a chargeback, also known as a payment dispute, is handled and processed by your credit card issuer or bank.

If you have a credit card, then you may have had an erroneous charge on your account that you needed to dispute at some point. When consumers report charge disputes to their credit card issuer, the process of a chargeback begins.

As a consumer, you’re protected under the Fair Credit Billing Act, which gives you the right to dispute certain charges. Be mindful that certain requirements must be met, such as reporting the charge within 60 days of when the charge appeared on your billing statement.

Let’s break this whole chargeback term down.

• What is a chargeback?
• Why you might decide to use the chargeback process
• Chargeback fraud

What is a chargeback?

Chargebacks are focused on charges that have already been posted to an account, whether to a credit card account, where the consumer is expected to pay the outstanding balance by the due date, or a debit account, where the consumer has already had the money deducted from a bank account.

The process of a chargeback can be complex and can involve multiple participants. But from the consumer’s standpoint, let’s focus on three of the main players in the chargeback process: you, the credit card issuer or bank, and the merchant that received the payment.

The cardholder

Consumers should take a look at their credit card and bank statements regularly to make sure that the charges are correct. If charges appear that you think are wrong and need to dispute, you can start by contacting the merchant and asking for a credit card refund. If the charge in question is not resolved by a refund from the merchant, consumers can report the charge to their bank or credit card issuer, initiating a chargeback.

The credit card issuer or bank

Once a consumer has disputed a charge with the credit card issuer or bank, the chargeback process has begun. The issuer or bank generally requires a written statement with the details of the charge and a detailed reason for the chargeback request. After, the issuer or bank will conduct its own investigation to determine whether the charge is correct.

The merchant (and its bank)

The merchant should be notified of the chargeback claim and given the opportunity to provide a response. If the merchant doesn’t respond, the chargeback is typically granted and the merchant assumes the monetary loss.

If the merchant does provide a response and has compelling evidence showing that the charge is valid, then the claim is back in the hands of the consumer’s credit card issuer or bank. The credit card issuer or bank may compare your initial claim to the merchant’s response, and the issuer or bank decides.

Why you might decide to use the chargeback process

Charges can be disputed for a variety of reasons. Here is a list of some common disputable charges.

• Unauthorized or fraudulent charges
• You received a damaged or defective item
• An item that you ordered was never delivered
• Charges were duplicated or an incorrect amount was charged by the merchant

As mentioned previously, the chargeback process can be lengthy. If the dispute is ruled in the consumer’s favor, it could cost the merchant money. Some payment processors will charge a merchant for chargebacks to cover administrative costs.

Keep in mind that a merchant probably wants to avoid the hassle of dealing with a chargeback. The old saying “The customer is always right” still has clout. Merchants most likely want your business and will do what they can to keep their customers happy. If keeping a customer happy means issuing a refund, a merchant might do it rather than spend time and money on the chargeback process and risk losing a customer.

Chargeback fraud

Despite the idea that chargebacks are in place to protect consumers from erroneous charges and untrustworthy merchants, dishonest consumers sometimes turn the tables and make false chargeback claims. This is known as “friendly fraud.”

Friendly fraud can occur when consumers contact their credit card issuer or bank directly for a chargeback rather than first asking the merchant for a refund.

The consumer may do this for different reasons, like intending to get the purchase for free, buyer’s remorse, an expired refund policy, the purchased item was no longer needed, they don’t recognize the merchant name on their credit card or bank statement, or even because they forgot they actually made the purchase.

These so-called “friendly fraud” claims may not all be made maliciously or with criminal intent, but rather because the consumer may think this is the only recourse available to get a refund and is simply unaware of other options.

Credit card fraud is illegal. Make sure you only dispute erroneous charges on your credit card and bank statements.

Bottom line

As a consumer, chargebacks are a valuable resource when it comes to erroneous or disputable charges on your credit card or bank statement. Be a responsible and honest consumer and search your statements with a fine-tooth comb. If you come across a charge you need to dispute, simply contact the merchant to see if you can get a refund. If the merchant refuses, you can contact your credit card issuer or bank, and ask about your options.

Although many of us have suffered from buyer’s remorse or splurged on a shopping spree we knew we shouldn’t have, this is not a reason to request a chargeback. But if a charge appears on your credit card or bank statement that you think is wrong, you can dispute the charge and begin the chargeback process.

We’ve all gotten those robotic calls with unrecognizable phone numbers that scream “scam!”

Easy to ignore and send to voicemail, or better yet, block. No harm done, and you don’t have to deal with some pushy con artist trying to get into your wallet. Yet, according to the Federal Trade Commission, consumers reported losing more than $905 million in 2017 to fraudsters. How are so many people falling for these scams?

The answer is that a lot of folks just don’t know how to protect themselves. Knowledge is power. Scammers may be trying to steal your identity and hard-earned money, but you can educate yourself to become less of a target. Continue reading to learn about a few of the common scams that have been all too lucrative for these tricksters. These swindles include IRS imposter scams, lottery scams, romance scams and grandparent scams.

The IRS is calling you. Can you be sure this isn’t a scam?

In 2013, the Internal Revenue Service made consumers aware of a phone scam across the nation: An imposter, posing as an IRS representative, tells the targeted victim that money is owed to the IRS, saying that a payment has to be made immediately via pre-loaded debit cards or wire transfer. If the target questions the imposter or refuses to cooperate, they are berated with threats of arrest or even deportation. How scary, right? I mean, who wants to owe the IRS money and have to deal with potential arrest?

That is exactly how fraudsters want you to think and feel. They want to have you make split-second decisions before you have time to think it over rationally. Here are a few tips to help you avoid falling for this IRS imposter scam.

• The first thing to know about the IRS is that it will not initiate contact via phone to demand immediate payment using a specific payment method. In addition, the IRS will not contact you through email, social media or text message to request personal or financial information. If you owe money, the IRS will generally contact you via the U.S. Postal Service — aka snail mail.
• As intimidating as the IRS may seem, the organization will not threaten to arrest you over outstanding balances.
• The IRS will not require payment via gift cards, prepaid cards or wire transfers. If these payment methods are required, it’s a good sign it’s a scam.

To speak to a live IRS employee about any questions you may have, the agency can be contacted at 1-800-829-1040. The IRS urges consumers to report scams to the Treasury Inspector General for Tax Administration and to file a complaint with the Federal Trade Commission. Reporting these scams can help the government detect patterns of fraud.

You’ve just won the Jamaican lottery! But you never bought a ticket.

I think we can all agree that we’d love to win the lottery. The chances of that happening are one in a million — actually several million. Yet unfortunate scam victims receive that phone call, email or piece of mail and think they’ve finally hit it big. The U.S. Postal Service regularly intercepts pieces of mail containing foreign lottery scams. According to the U.S. Postal Inspection Service, consumers report losses of roughly $120 million a year to lottery scams.

Lottery scams focus on our excitement and greed. The fraudster is likely going to play on those emotions — they’re excited to tell you about an awesome opportunity. They might rattle off tons of information in a short amount of time, hoping to confuse you. They’re also going to tell you that to receive your huge winnings, you need to buy a lottery ticket or pay a minimal fee — whatever their word of the day is. Following these tips can help you avoid falling victim to a lottery scam.

• Remember that playing a foreign lottery via mail or phone is actually against federal law.
• Be extra cautious about any demand for payment required to receive winnings.
• Do not give out your personal identification information, bank account data or credit card numbers to receive winnings.
• And if you didn’t play the lottery, you most likely didn’t win the lottery.

You found the love of your life online. Now that person is asking you for money.

Online dating and social networking sites have opened new paths to finding that special someone. People across the world use the internet to meet each other without leaving the comfort of their homes. Despite many successful relationships blossoming from online dating, there are also many fraudsters looking to start relationships with only one thing on their minds —your money.

The FTC reported that heartless scammers claimed $220 million from online dating scam victims in 2016, and that reports to the FBI tripled from 2012 to 2016. Below are some signs that the person you’ve fallen for might be in it for the wrong reasons.

• The relationship progresses quickly. “I love you” is used almost right away.
• You are pushed to move your conversation off the dating site.
• The person claims to be from the U.S. but is overseas on business or serving in the military.
• Plans to visit constantly fall through because of unexpected circumstances.
• The person requests money for an emergency or to pay for travel to visit you.

If you are asked for money once and you send it, it’s almost guaranteed that you’ll be asked again. Remember: Once you’ve sent money via pre-paid debit or gift card, it’s probably gone forever. So make sure you think before you send.

Romance scams can not only break the bank but also your heart. These fraudsters often specifically target individuals who are lonely. It can be a tough pill to swallow to think that you got scammed by someone you once trusted and confided in.

If you’ve been the victim of an online dating scam, report it to the dating website or app, the Federal Trade Commission and the FBI’s Internet Crime Complaint Center.

A grandparent’s worst nightmare: A grandchild is in trouble

The grandparent scam, also known as the family emergency scam, is pretty scummy on the fraudster spectrum (which is already pretty bad). This scam targets what we hold near and dear to our hearts: family.

A fraudster may pose as a loved one, distant family member or grandchild, stating that an emergency has occurred. Maybe there’s been an arrest or a horrible accident, or help is needed to get back home. Fraudsters may even go as far as posing as a law enforcement official who is allowing the panicked “loved one” to say a few words. No matter the emergency, the only solution posed in this fraud is to send money.

As dreadful and convincing as the phone call may sound, take a deep breath and remember these few tips.

• Verify that the call is truly an emergency — reach out to other family members or friends for confirmation.
• If a law enforcement agency or government entity is mentioned, contact the entity yourself to verify the information.
• Do NOT wire money. A money wire is like sending cash. Once it’s gone, it’s gone.
• Know that threats of secrecy or punishment if the request isn’t met are a red flag that you’re dealing with a scam.
• If the call is from a “family member,” ask the person questions a stranger wouldn’t know.

The FBI’s Internet Crime Complaint Center has been receiving reports of the grandparent scam since 2008. While the concept of the scam itself is an old trick, fraudsters have reached new levels of cleverness with the assistance of social media.

Social media stalking is no longer only for a jealous ex. A few minutes spent on a social media page can reveal many personal details about the account holder. Someone can learn about where you live, the names of your family members, and physical descriptions of family members posted in pictures. That’s why it’s important to periodically review your privacy settings on social media.

Bottom line

The common scams mentioned in this article are only the tip of the iceberg in relation to the number of scams people get hit with day in and day out. If you feel that you have been a victim of a scam, don’t keep it to yourself. Report all the details to the appropriate entity. Check out these websites for informative tips: the Federal Trade Commission, the Federal Bureau of Investigations and the IRS.

Trust your gut. If something seems too good to be true, it most likely is.