In September 2011, in a sleepy community outside London, Ontario, close to 1500 people were forced out of a job. The workers that were displaced by the St. Thomas Ford assembly plant shutdown have some tough realities ahead of them. In the short term, the reality of trying to find a job in a region heavily dependent on the manufacturing sector will prove to be difficult. Some will be moving to different communities throughout the region in search of work, others will retrain for a completely different career. All of the displaced workers whether they find a job within weeks, months, or even worst case scenario years, could find themselves in a delicate financial situation.
When reviewing each of our customers on a case by case basis we strive to learn the circumstances that brought them to be searching for bad credit car loans in the first place. A very common explanation for the cause of bad credit is a previous job loss. Our customers explain that the sharp and dramatic drop in expendable income made it extremely difficult for them to maintain monthly bills. For those that had lost their vehicles, they faced an uphill battle getting bad credit car loans in order to get back on the road.
Here are a couple of suggestions we have come up with to avoid your credit taking a nosedive and a couple of suggestions on how to get your bad credit on track for recovery if you just couldn’t make ends meet.
Make Payment Arrangements
Most of us have had to do it in the past. You call your bill holder (Hydro, Cell Phone carrier, Gas Company) and make a payment arrangement. You generally provide a promise of payment at a later date to ensure that your account doesn’t go into collections. If you find yourself in a position of employment uncertainty the first thing you should do is make arrangements. Your credit can be seriously damaged by a few bills that fall into collection departments. Making those arrangements can make all the difference going forward. Additionally it might allow for a little more flexibility with cash flow issues you might be suffering from and allow you to realign payment priorities. It might also be a good idea to reduce your services slightly and save a bit of money that way. Do you have a cell phone and a home phone? Call your cell provider and ask to have the account temporarily suspended. Most have a monthly fee that is charged for the account to be on hold and it doesn’t count towards contract expiry, but it could save you hundreds if your job search becomes lengthy.
Reassess your Budget
As stated in an earlier post: 3 Healthy Habits to Save You Money on Fuel! , having consistent and committed budgets whether it is personal finance or fuel expenditures can provide comfort in knowing where you stand and can give insight as to where you need to focus your finances. If you find yourself facing a job loss, you should consider things like: eating out less, cutting down unnecessary driving, putting down those new designer shoes and heading to a discount store. The sacrifice of setting low limits for things that weren’t limited when you were fully employed will pay dividends when you finally land that perfect new job.
If you used these budget conscious methods of trying to maintain your cash
flow and credit health and still just couldn’t make ends meet, don’t worry it’s
not the end of your healthy credit forever. Time and effort is all that is
needed to raise your bad credit to good credit status!
Keep an eye on your Credit Bureau Report
You can obtain copies of your credit report online for a small fee (or free if you request a mailed copy). It is highly recommended that you should be doing this anyways to ensure that you aren’t a victim of credit fraud. Regularly reviewing your credit report allows you to see the progress (or worst case – regression) that you have made in your credit rejuvenation journey.
One important thing to keep in mind is credit utilization. When looking at your credit report, make sure that the balances on your revolving debt (open lines of credit, credit cards, etc) are no more than 30%. That means that you have 70% of your limit available. This shows that you can be responsible with credit that is granted to you. That number is not in any way an industry standard. It is my own personal goal with my credit utilization ratio!
Look for any collections that you may have been unaware of and take initiative with poor rated accounts and focus on them to try and bring them back up to good status. Get your credit report often and rise to the challenge!
Bad Credit Car loans or Leases
It is no secret that EzeeCredit reports to the credit bureau on a monthly basis. It is also widely held that automobile debt is not “bad debt” to have on one’s bureau. It is such a powerful tool that can be used to help rejuvenate a bad credit situation. We have had customers from all over South-western Ontario come to us and trade in their older vehicles, get something newer and help rejuvenate their bad credit all at the same time! Not only do our customers benefit from less unexpected auto expenditures, but they can look up their credit report (something that you are going to do regularly right?!) and see it right there, helping to improve their credit right before their eyes! Now due to the topic I had to plug the company, just beware that not all places that advertise credit repairing bad credit car loans will actually report to the bureau (and therefore won’t help you at all).
So there you have it…
Facing a tough job loss doesn’t mean financial disaster. With some good planning and effort anyone can maintain healthy credit. For those that just can’t quite make ends meet, there is always a light at the end of the tunnel. Use the tools outlined in this post like regular credit reports and bad credit car loans to rejuvenate your credit. Time and some dedication is all that is required!