How to Rebuild Your Credit After Long-Term Unemployment

If you have missed some loan or credit card repayments because of a long-term unemployment, it is more than likely that your credit score did get affected. With the right approach you can boost your credit scores fast and get new positive credit accounts that will make the job much easier.

A lapse in employment can leave your credit score in shambles. You can do all you can to preserve your credit score, but during a long period of unemployment, you may have to make some difficult spending decisions that result in credit score damage. Once you’re back on the clock bringing in steady pay, you can begin rebuilding your credit score.

Get an idea of how much money you’ll be bringing in.

First, you need to know what you’ll be making on your new job.

That will give you some idea about the lifestyle you can afford and what you can afford to put towards getting your credit back on track. Keep in mind that you’ll have taxes or other benefits deducted from your paycheck, so your actual take-home pay may be 30-40% less than what you’re expecting. Your first paycheck will give you a true idea of what you’re going to make enough month.

Create or update your household budget.

Next, create a budget including all your known expenses. For your debt payments, use the regular or minimum monthly payment. Paying extra to catch up is part of the plan to rebuild your credit, but first, you have to figure out how to pay your regular monthly expenses. At the end of the budgeting process, calculate how much money you’ll have leftover after paying bills. This is the extra money you can put toward catching up on your bills.bills.

Read more: https://www.thebalance.com/how-to-rebuild-your-credit-after-long-term-unemployment-960363