Handling a temporary financial crisis
Everyone comes across those times when there is month left at the end of the money but the thought of using short term loans to cover those times doesn't always occur to everyone. Instead of seeking ways to carry them through until the next payday, they make unsuccessful attempts to prioritize their bills, sometimes failing to recognize the importance of paying all their debts.
Your credit record
Some are often uneducated in the way credit works and think that as long as they pay the payments, even if they are late, it will not affect their credit negatively. They don't realize even paying late affects their credit rating at least with that company. When you consistently pay credit cards late, the issuer will eventually refuse to reissue your cards when they expire, and this action will negatively affect your credit. To avoid that potential, you need to plan ahead for those times you may need to weather a financial crisis.
Have a backup plan in place before you need it
Another problem many people have is they don't plan ahead for emergencies by having money in a savings account. Lack of emergency funds leads many people to rely on credit cards to pay for daily expenses and leaves them struggling to make the payments when they charge more than they can afford to pay when the minimum payments increases. Instead of looking for a temporary solution, they resort to skipping payments or paying amounts lower than the lender requires. When the lender starts calling, they become frustrated and try to avoid facing the situation, especially if they don't have money set aside. It's always advisable to have the equivalent of two months' salary in a savings account but during an economic downturn, as we are currently experiencing, most people are struggling just to make ends meet thus leaving them few funds for emergencies. ... click here to read the rest of the article titled "How to Use Short Term Loans to Protect Your Credit Rating"
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