Losing a job is one of the most common reasons why people end up with bad credit.The absence of a stable income resource can easily lead to acquiring debts to make up for one’s financial needs.

If you’re in this situation, what can you do to avoid getting into bad credit? Consider the following advices on how to keep away from bad credit:

Watch out those spending habits!

Obviously, with the loss of your job, you are left with a very limited financial support. It only follows to cut back on your spending and stretch what’s left of your budget.

Carefully make a list of your budget plan for the month, allocating your money for that period to cover all your expenses.

If you’ve been used to a big salary and have the tendency to spend, this sudden change in your situation can pose a great challenge. Even if you have extra money in your savings account, you should be aware that you are in a vulnerable situation. Unless you’ve found a new job to support you, be very careful about how you spend every cent of your money.

Use your credit cards when, but wisely!

Since you’ll be needing cash for your everyday use, your credit cards can come in handy. Use it to make purchases that are absolutely necessary. Thus, you don’t have to use your debit card when you run out of cash in hand. However, don’t be tempted to use your credit card in buying unnecessary things. Remember, you’ll be paying it back before the due date ends and if you fail to do so, that could be the start of bad credit. Keep in mind too, that this particular advice to use credit cards to buy necessities is just a temporary option while you’re still looking for work. When you’ve found a new employment, never use your credit card for things you can pay in cash.

Talk to your creditors.

If the due dates of your payments are nearing –for instance, credit cards or loans – it would be best to contact your creditor and let them know about your recent job loss. Explain your situation politely and ask if adjustments can be made on your terms of payment until you’re able to find a new employment.

Don’t be afraid to be honest with your creditors. Most creditors will appreciate this gesture because it shows that you are a responsible borrower. You can also seek the assistance of a legitimate and reputable credit counseling agency to help you make a negotiation with your creditors. In any case, do not attempt to hide from your creditors just because you’re unable to submit your payment. It is better to try to negotiate with them as early as possible than wait until your debts accumulate and get out of control.

More reasons to avoid bad credit. . .

Since you’ll be looking for a new job, you really have to take care of your credit reputation. For your information, creditors are not the only people who check on an individual’s credit history. Employers too can judge your credibility based on your credit standing. If you have an excellent credit, you can get hired more easily compared to an employee with a bad credit history.

It is also recommended to check your credit report and see if there are any errors or inaccuracy in the details. Such inaccuracies can only worsen your credit score. If there are, contact the three major credit bureaus right away and ask that your credit report be updated.

Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on credit cards for bad credit,credit cards for good credit and other credit-related issues. Its main objective is to help people build good credit. Copyright © 2008

By Allison May

Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on Guaranteed Approval credit cards, Unsecured credit cards for Bad Credit and other credit-related issues. The main objective here is to help people build good credit. Add Allison on

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