How You Handle Unexpected Financial Events

At some point in our lives most of us will face some sort of unexpected financial situation. Whether it is a loss of job, a major repair bill, auto accident or some other event, it is important that you plan for this occurrence. Plans for such an occurrence are having some money in savings, asking family members for assistance and possibly having a credit card that is not used unless such an emergency arises. It is having such a plan that will mitigate damage to your credit score while you work your way through whatever unfortunate situation you face. While you may not have sufficient resources to weather a long term financial problem, to the extent the problems can be isolated the easier it will be to improve your credit score and/or explain the situation in an effort to re-establish your credit standing. It is extremely important to remember that once the crisis is solved that further late payments are not allowed to occur. Unfortunately, once people miss a few payments without serious consequences such as loss of collateral (house or car) they fall into the trap of thinking they can occasionally miss a few more payments here and there. This is a huge mistake and should be avoided as sporadic late payments are much worse that an isolated event when trying to establish a willingness to pay.