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Managing Your Credit History in a Financial Emergency

by Kristopher Samuels Writer

When 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.


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About Kristopher Samuels Junior   Writer

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Joined APSense since, August 29th, 2019, From Toronto, Canada.

Created on Jun 11th 2020 13:26. Viewed 415 times.

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