Managing Your Credit History in a Financial Emergency
by Kristopher Samuels WriterWhen times are tough, your family’s health and welfare are top
priorities. With these important things taking your full attention, your credit
history may be the furthest from your mind. But this report may have an impact
on your family’s future — affecting everything from the rates you pay on an
installment loan to the ease with which you can advance your career.
That’s why it’s important to monitor your credit, even while
you’re fielding an emergency. With that in mind, here are some things you
should do to manage your credit history.
Know What Roll Credit Plays
Your credit history is a record of all the past personal loans,
lines of credit, and credit cards that your lenders share with the nation’s
biggest credit bureaus. If your lenders report your payments, these accounts
will show up in your file and contribute to your overall score.
Your credit score represents the type of borrower you are. If you
struggle to make on-time payments, you’ll have a low score. This may affect
your selection of loans you want to use in the future, as well as the rates and
terms you might pay.
The word credit can also describe the installment loans, lines of
credit, and credit cards that you rely on in emergencies. Emergencies being the
operative word. The installment loan specialists at MoneyKey recommend these
products for unexpected emergencies, like medical bills or auto repairs.
Borrowing money may not be the right option if you want to go on
vacation or afford a cosmetic renovation, but it could help you out during a
rough patch. If you need help, visit MoneyKey.com to learn more about how installment
loans work.
If Possible, Pay Your Bills
Times may be tough, but do your best to pay all your bills by
their due date. This includes everything from rent and utilities to insurance premiums
and your cell phone plan.
If you decide to get an installment loan to help with an
unexpected emergency expense, add this to the list of “must-pay” bills. The
same goes for any additional personal loans, lines of credit, or credit cards
you may use.
Get in Touch with Creditors
If you can’t pay your bills — no matter how hard you pinch your
pennies — don’t try to bury your head in the sand and wait for this to blow
over.
Hiding may seem like the natural thing to do, but it takes you
down a dangerous path. If you keep mum about your difficulties, your creditors
won’t know the reason why you’re late. All they’ll know is you haven’t paid.
Your creditors need some backstory to understand what’s really
going on. So, tell them. Pick up the phone and talk with your creditors before
you miss a payment. Once your creditor knows why you’re struggling with your
bills, they’re in a better position to help you. Many companies have policies
in place to adjust or defer your payments to help lighten the load.
Check Your Credit History
A financial emergency is a great time to start reviewing your
credit history. You’ll be able to spot any potentially inaccurate or fraudulent
entries and dispute them before they tarnish your good name.
All three of the major reporting agencies must share your report
for free every year. You can get your free copies here.
If your review shows something that doesn’t belong, get in touch
with the agency that generated the faulty report. They have policies in place
to help you dispute these
inaccuracies. Removing these errors will help to keep the information in your
file accurate, which is crucial if you decide to apply for installment loans or
lines of credit in the future.
Rewrite Your Budget
Some financial emergencies are fleeting things that arrive with a
single bill. Other emergencies are unwanted guests that last throughout long-term
unemployment or health issues.
If you believe your financial emergency may have lasting power,
sit down with your budget. Tightening this spending plan may help you put your
income where it’s needed most. Cut out unnecessary splurge items and learn how
to reduce what
you spend on utilities, groceries, and other
necessities.
Eliminating spending means you don’t have to spread your available
cash quite as far. It may also free up more cash to go towards bills that show
up unexpectedly.
Be Proactive
While it may be tempting to put your head in the sand and pretend
your emergency isn’t happening, this avoidance strategy only promises to
prolong your suffering. It may even make your emergency worse if you miss
important deadlines. Fines, increased interest, and even damage to your credit
could follow on the heels of a late bill.
Fortune rewards the proactive. Acting fast gives you a head start
recovering from your financial emergency. Whether you’re handling a health
scare, layoff, or unexpected repair, don’t delay. Spare some time to focus on
your credit. The tips you learned here today may help you come out the other
side in better shape.
Sponsor Ads
Created on Jun 11th 2020 13:26. Viewed 415 times.