| If you've currently found yourself unemployed, | | | | use your credit first and save your cash for last. |
| don't get discouraged....you're in good company. | | | | Pay with credit for your necessities as much as |
| The unemployment figures in the US are higher | | | | possible. Make sure you follow your new budget |
| than they've been in decades. Now that the | | | | so you keep these charges to a minimum which |
| unplanned and unwanted event has arrived, if you | | | | will make your credit last as long as possible. |
| have a savings account, regardless of how much | | | | Employers May Pull Your Credit |
| you've put into it, and you have some available | | | | Prospective employers often pull your credit |
| credit lines, you'll have two tools that will be a | | | | report as part their requirements in order to offer |
| huge help to you to get through this time without | | | | you a job, so to maximize your chances of |
| damaging your credit. Let's look at some steps | | | | getting a job, you'll want the best credit you can |
| that you'll need to take. | | | | possibly have. |
| Time To Recalculate The Family Budget | | | | Preserving Your Credit While You're Unemployedo |
| Sit down with your family, including your children, | | | | Keep your balances at less than 30-50% of your |
| and discuss the situation. You'll need to talk about | | | | high credit limit. This will help keep your credit |
| temporarily reducing expenses to keep in line with | | | | score as high as it can be. The closer your |
| your now reduced income. Do not be | | | | balance gets to your available credit limit, the |
| embarrassed to talk with your kids about this | | | | lower your credit score drops, even if you make |
| situation. Children need to be aware of issues that | | | | your payments on time every month.o Make all |
| are now going to affect the family and they'll also | | | | credit card payments on time. Making credit card |
| learn an important lesson of how adults deal with | | | | payments by no later than the due date has a |
| difficult situations and work together to overcome | | | | 35% affect on your credit score. If you start to |
| them. | | | | get behind on your payments, this could attract |
| Get Help From Credit Counselors If Needed | | | | the attention of other creditors who begin to get |
| If you're afraid you're just not going to be able to | | | | nervous that you're going to do the same to |
| make ends meet during this difficult time, look for | | | | them, and they may freeze, suspend or even |
| an "accredited" credit counselor early on. A | | | | close your account. If this happens, you will have |
| legitimate, certified credit counselor may be just | | | | less credit available to use during this time and it |
| the help you need to begin resolving your financial | | | | will also impact your credit score for two reasons. |
| concerns. A credit counseling agency serves as an | | | | The first is the late payment and the second is if |
| objective third party to help you sort through | | | | the account is closed, you no longer have the high |
| your problems, give you some credit education, | | | | credit limit on that account and that will also |
| offer personalized budgeting advice, and design a | | | | affect your overall debt-to-limit ratio.o Pay the car |
| customized plan to get you out of debt at no | | | | loan first. A car can be repossessed in as little as |
| charge or a very nominal fee. | | | | two weeks. If you lose your car, how will you get |
| Severance Pay From Your Employer | | | | to job interviews and eventually get to work in |
| If you're lucky enough to be getting severance | | | | order to keep a roof over your head by paying |
| pay from your employer but have not received it | | | | rent or a mortgage payment?o Pay your rent or |
| yet, talk to your HR department and ask them to | | | | mortgage second. You don't ever want to get |
| increase your "withholding exemptions" up to the | | | | more than 60 days behind on your mortgage. If |
| maximum allowed. This will reduce the amount of | | | | you do, the foreclosure process will begin and this |
| tax that is withheld from your income and give | | | | is a very difficult process to stop once it's started. |
| you a little more cash in your pocket. Be aware | | | | If you're having trouble paying this bill, contact |
| that you may have more taxes to pay because | | | | your lender immediately (preferably before your |
| of this strategy, but with reduced earnings and | | | | even 30 days behind) and see what programs |
| job hunting expenses that you may be able to | | | | they have to offer to help you during this time. |
| write-off, you may offset this amount somewhat. | | | | What To Do When You Run Out Of Credit And |
| Stay Away From Cash Advances | | | | Options |
| Whatever you do, do NOT use cash advances on | | | | If you aren't able to make any payments on |
| your credit cards as a way of generating income. | | | | maxed-out credit cards or credit lines and you still |
| The cost of using money this way is much | | | | have no job possibilities coming up, something will |
| greater than using the credit card to pay for it. | | | | have to be done. You only have three avenues to |
| Cash advance almost always come with extra | | | | work with....income, expenses and credit. If credit |
| fees and usually have a much higher interest rate | | | | is not an option, then income and expenses are |
| associated with repayment. | | | | your only other alternatives that you can change. |
| Looking At Credit From A Different Perspective | | | | You'll need to revamp the budget that you |
| Prior to becoming unemployed, you used credit to | | | | prepared when you first became unemployed. |
| spend your income in a different way than | | | | Take a look at each and every item and |
| carrying around your paycheck in your pocket. | | | | determine where you can make some drastic |
| You also used it for purchases that took you | | | | steps to reduce these amounts. Can you move |
| some time to pay off because they cost more | | | | to a smaller place? Can you move in with friends |
| than you could initially afford. When you're not | | | | or family? Can you sell things around your house |
| working, you don't have that paycheck coming in, | | | | to bring in some additional income? Consider taking |
| so you may need to use credit for basic living and | | | | a side job in the interim to tide you over until you |
| job-hunting expenses only. Remember, this is NOT | | | | can find something in your field. If you need |
| the correct way to use credit on a regular basis, | | | | income, you may have to take what you can get |
| but as an alternative to getting through this | | | | for awhile. |
| temporarily insolvent time in your life. | | | | This time can be very stressful, but try to keep |
| Save Your Cash Until Last | | | | in mind that you will come out stronger that you |
| Your cash cannot be replaced once it's gone, so | | | | went in, given time and perseverance. |