SolveYourProblem eLearning Series: Credit Scores
Help Me Improve
My Dreadful Credit Score
(
26 pages )
Credit Score Tips
Tip #48: Prepare for financial emergencies.
Few
of us think about what would happen if we lost our jobs or
suddenly became too ill to work. The thought is simply too
terrible to contemplate in many cases, especially if we are
living paycheck to paycheck with a job as it is.
The
fact is, though, that financial emergencies happen to almost
everyone at some point and they can have devastating impact
in your credit. In fact, most people who declare bankruptcy
do so because of a huge financial disaster such as sudden
unemployment, huge medical bills, a lawsuit, or divorce.
Despite this, few people plan for these problems, even though
they can happen to anyone.
If
you want to keep your credit score in good trim, you should
know exactly what you would do in case of an emergency. Developing
an actual written plan can help you by letting you take action
to save your credit as soon as an emergency occurs. Some
items that could be on your financial emergency plan could
include:
1)
A list of all assets you could liquidate if you had to.
2)
A list of all extras or luxuries you could cut out of your
life right away if there was a problem (i.e. newspaper subscriptions,
cable television, water delivery service, Friday nights at
the movies).
3)
A list of any resources you have that could help you in case
of an emergency. Maybe you know a lawyer who deals in financial
facets of the law. Maybe you have insurance that could help
you. Maybe your employer offers a severance package. Whatever
it is, write it down. Keeping a list of these resources will
make them easier to access in case of an emergency.
4)
Other ways you could get money if you had to - jobs you could
take, things you could rent out to others.
Tip #49: Get overdraft protection, insurance
on your credit cards, or other services to keep your credit
in good shape.
Talk
to your bank and lenders about services they offer to keep
you safe. Overdraft protection, for example, is a basic service
that often costs nothing or very little extra but which protects
you in case you withdraw too much money from your bank account.
With
overdraft protection, you do not get a “ding” on your credit
report or a charge for insufficient funds. In most cases,
you get a day or two to add more money to the account to
cover the gap. Some credit cards and other loans offer a
similar service or offer insurance which protects you in
case you lose your job and are unable to pay for a few months.
Tip #50: Get insurance.
Insurance
for health, your car, your home, and for liability can help
you avoid the huge legal and medical bills that can occur
from an accident or sudden problem. For a small monthly fee,
you are covered against unexpected events that can drain
your finances and leave you with out-of control debt.
Tip #51: Get a prenuptial agreement
and have a lawyer go over all your business contracts.
Most
bankruptcies are caused by the fallout that occurs as a result
of business failures, law suits, health costs, and divorces.
Getting a prenuptial agreement helps to ensure that a divorce
will not adversely affect your finances and lead to a ruined
credit rating (keeping accounts separate while married is
also a good idea, as your spouse’s own financial troubles
can all too easily become your own). Having a lawyers look
over contracts can at least reduce the risks of unfavorable
agreements that can put you at a disadvantage in business.
 
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