Aug23
Why You Should Never Give up on Your Credit
You’ve lost your job, you’ve missed months of credit card payments, and your credit is the last thing on you mind. It is best to just walk away from your debt obligations, right?
Wrong!
It may be quite tempting to just give up on your credit, especially if you feel your debts are simply too overwhelming to handle anymore. However, giving up on your credit is never the right decision to make, and here’s why:
- Judgments – Although creditors of unsecured loans such as credit cards and personal loans cannot take away your home, for example, they can take you to court where a judgment against you can be made by a judge. If a creditor wins a judgment against you in court, the court can begin to garnish your wages. Instead, it is best to call your creditor and set up a realistic repayment plan so you can stay on good terms with them. Ignoring the problem will not make it go away; it will simply delay the inevitable.
- Other credit – Your poor credit history can affect you years into the future. In other word, an abandoned credit card today can affect your ability to obtain a home or car loan years down the line. You may have forgotten about your past credit mistakes, but I guarantee you creditors and credit reporting agencies have not.
- Jobs – The job market is tight, and employers are increasingly looking further into their employees’ habits. As a result, it has become more common for employers to look at the credit scores and reports of potential employees. The reason is quite simple: some employers may find a direct correlation between a potential employee’s responsibility and their credit score. A low credit score may raise a red flag with an employer, thereby preventing you from getting that job of your dreams.
If you feel like your credit cards and other loans are simply too much to handle it is best to contact your creditors directly and talk to them about your financial struggles. Most creditors will be willing to work out a more affordable payment plan with you, so it always pays to ask.