19 Aug Tips on How to Protect Your Credit If You Lose A Job
Many people are experiencing job loss or reduced work hours all over the world due to on-going recession — and even those who are still employed may fear facing financial hardship as the impact continues. This uncertainty makes it difficult to plan for the future and to know which financial goals to prioritize in the short term.
One of the worst things about getting laid-off is having to worry about money and how you are going to pay the bills. It adds even more stress to your life when you’d rather be focused on getting hired for a new job fast.
However, losing your job will not necessarily endanger your credit rating, neither Can Credit Card Debt Keep You from Getting A Job. As credit agencies don’t factor your employment status into the calculation of your score.
Of course, if the loss of income impacts your ability to pay your bills or pay them on time, then your credit rating will suffer. But there are steps you can take to keep your credit rating as intact as possible. If you’re proactive, you may be able to minimize the impact of being out of work on your credit.
What to do if I Lost My Job and Can’t Pay My Credit Card?
This is the most frequent question that strikes every person’s mind who have a huge loan on their head. So, if you are the one who is having trouble paying your credit card bills after losing your job, you’re not alone.
Credit card debt can feel overwhelming even when you are employed, and many people struggle to make ends meet after being laid off or furloughed.
Here are some ways that can help you on How to Get Out of Debt with No Job or help managing your debt during a period of unemployment:
Make the Minimum Payment
If you can afford your credit card’s minimum monthly payment, then continue making that payment for as long as possible. This is because Minimum payments keeps your account in good standing with both your lender and the three credit bureaus. As well as you won’t get charged late fees or penalty APRs for missing payments.
Contact Your Creditors
If you have Lost Job Can’t Pay Bills, even the minimum payments too, then contact the credit card issuer first. You might be able to negotiate an agreement that temporarily waives your interest and allows you to postpone monthly payments. It might be possible that they let you pay off a portion of your debt in a lump sum.
For example: Many banks and lenders are currently offering special assistance to consumers affected by the COVID-19 pandemic. So, don’t be afraid to call customer service for help.
Consider Debt Consolidation
If you can consolidate your debts into a single monthly bill, then you might find it easier to keep up with the payments. Balance transfer credit cards are designed to help you consolidate multiple credit card balances onto a single card, generally with an introductory zero percent APR period.
This gives you the opportunity to make payments on your debt without worrying about interest charges.
Consider Credit Counselling
You can plan consulting a reputable credit counselor who can help you make a budget. They help you create a plan or a Creditor Hardship Programs for paying off your debt and direct you towards appropriate debt relief options.
Will Credit Card Companies Work with Me If I Lose My Job?
This question might horror you if you when lose you job while in debt.
Once you go 60 days past due, the debt collection practices get more aggressive, but hardship options are still possible. So, normally, credit card companies will work with anyone who has experienced a job loss or medical situation and is not delinquent because of overspending and irresponsible use of the account.
Even if you fall into the latter category, however, you may still be able to negotiate. Once you set up a financial hardship plan, the card company will likely deactivate your account, so you won’t be able to use it any longer.
You Might Refer Reading: How to Avoid Common Pitfalls of Payday Loans
Tips on How to Protect Your Credit If You Lose A Job
Following mentioned tips can help you on How to Protect Your Credit If You Lose A Job. As well as to minimize the impact of unemployment on your credit score.
1. Create an Emergency Fund while you are employed that is equivalent to at least six months of your payment, which you can use it during the period of unemployment.
2. Start Collecting Unemployment Right Away. Don’t wait to file for unemployment compensation. Apply for unemployment benefits immediately after losing your job. It won’t be as much as your pay check, but it will still help you pay the bills.
3. Don’t Close Credit Card Accounts while unemployed since that can-do further damage to your credit rating. Your credit rating is calculated by determining the ratio of your outstanding balances to the total credit available. Therefore, closing accounts will reduce your total credit available.
4. Pay At Least Some of Your Bills. If possible, be sure to make at least the minimum payment with each monthly bill.
5. Defer your Student Loans. If indebted with student loan, then contact student loan creditors and request an economic hardship deferment. If it’s approved, you can hold off on payments for up to three years.
6. Start a Job Search Right Away. Vigorously start job search as soon as possible after you lose your job to minimize the length of time that you are out of work.
7. Consider Taking on an Interim Job: if you are ineligible for unemployment benefits. Even if you are eligible for unemployment compensation, you may be able to generate more income through interim jobs.
8. Don’t Be Afraid to Ask for Help. Ask your family or friends for financial assistance. You won’t know if they can assist if you don’t ask.
Lastly, these tips on How to Protect Your Credit If You Lose A Job might not ease the pain of unemployment. But they will keep trouble from infiltrating into another area of your financial life.
The Bottom Line
Do your best to make the minimum payment on your credit cards each month, even when facing financial hardship, to avoid late fees, penalty APRs and credit score issues. You can also try to contact your credit card company to see if you’re eligible for hardship programs to reduce your monthly payments or interest rate.
While you might be considering pulling money from your retirement fund or taking out a loan against your home to help pay off outstanding credit card debt. It’s better to solve your Unemployment Credit Card Debt problem by carefully budgeting and looking for new income sources when possible.
Lastly, remember that you are not alone. Many people are facing similar financial situations and understand that it will take time for a full financial recovery.
Until then, ask help from family or friends, or avail advantage of any unemployment benefits, government aid available to you. Work with your creditors to manage your current balances and do your best to keep your financial picture as positive as possible.
Here we will put an end to this blog for – How to Protect Your Credit If You Lose A Job. If you have any queries, then feel free to connect us through comment section box below.
Till then, stay tuned……………
No Comments