Unemployment credit score

Credit Score After Unemployment and Loans

At the tail end of a period of such high unemployment rates, many Americans are getting back to work and bidding farewell to the stress and upset of being without a job during the Covid-19 pandemic.

The re-entry into the workforce can feel like a new beginning, a fresh start, a clean slate. But there are a few key steps to rectifying or preventing some of the potential damage caused to your credit by unemployment.

Here are a few of the necessary steps you will want to take:

Saving is the New Spending

saving moneyOver the past few weeks, months, years, you’ve likely made plenty of adjustments to your everyday life.

Generic grocery store brands replaced big names in your pantry, Wal-Mart outings began to seem exciting and ground beef has become the top source of meat in your diet.

While now you may be able to afford steak dinners and fancy bottles of wine, take a lesson from the life you’ve been living before re-employment and stick to the basics with luxuries enjoyed only in moderation.

Grocery shopping on a budget can be stressful, but now that your budget may be lifted, try sticking closely by it and you might even find it exhilarating.

Get Insured

Health insurance often goes out the window with employment, as does life and disability insurance.

If your new employer is offering these policies, ask about them right away, so as not to miss the opportunity to enroll. If not, set up an appointment with an insurance agent with money designated from your very first paycheck back.

Otherwise, an accident or illness could set you right back to where you just were.

Develop Payment Plans for Lenders

develop payment planIf you’ve been behind on any car or payday loans, contact your lenders and ask if they can help you in establishing a reasonable plan to help get your payments up-to-date.

Most reputable payday loan companies will be more than willing to work with you, but if yours is not, contact the U.S. Housing and Urban Development Administration for help.

Also, keep in mind that new credit card legislation has allowed exorbitant interest rate increases. So your credit card may actually be one of the debts you put more focus into paying down than others.

Put Yourself on an Allowance

While you may feel like all of your money must go toward rent or mortgage, insurance, car lenders, and other bills, setting up a “salary” for yourself will make you feel more in control.

If you really need $2,500 a month for bills, debts, and necessities, but have another $500 leftover, put that directly into savings. If you are essentially only allowing yourself to take home $2,500, then anything bonus can be saved up for a rainy day.