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Given the unsteady nature of the economy where losing ones job is a very scary, but real possibility, what can you do to protect yourself and your credit history? The easiest and best way is to build up a decent nest egg of savings to help ride out the downtimes that may get in your path. However, this is difficult for a lot of people to do. While this blog does not focus on Credit Repair, there are may books and resources out there that focus extensively on this type of situation. Instead, we will focus on ways to protect your credit rating and decrease your expenses during the difficult times.

If you have ever gotten laid off, fired or lost your income in one way or another, you should contact everyone who you own payments to. Call your credit card companies, your auto loan lender, the bank that issued you your home mortgage, your utility and phone company, etc. You should ask to speak with a credit manager or consult at each of these places. Explain your current situation and ask if you can be put on alternate plans or possible skip a few payments. You could say something along the lines of “I just was laid off from my job and don’t have an income. Its going to take some time for me to get a new job and get back on my feet. Is there my way I can skip a few payments until I get that new job and can
start paying you again?”

Discuss your options with the lender. Some won’t be able to bargain with you while others may give you a few month grace period for payments. You don’t know what you can get until you ask. After calling them all, you now know what bills you have to pay and what ones can wait for several months. If your unemployment and savings can cover the “must
pay” bills, your credit rating will stay healthy. And, if you find that replacement job in time, your good credit rating is preserved, just as though there were no financial crunch. Be sure to keep an eye on your Free Annual Credit Report during these times to ensure that no negative marks are being accumulated.

With this disaster planning and a bit of luck in the job market, you will get through these troubles with your good credit intact. And, if things don’t work out well and it
takes a bit longer than expected to get back to work, this method will at least minimize the damage done to your credit rating. And this will make the subsequent
cleanup of your Credit Report much easier to accomplish.