It is one of life's small cruelties that the times when you need
credit most badly, are also the times when lenders are least
willing to give it to you. When you are finding it hard to meet
your obligations, your car payments are behind, your credit
cards are all fully loaded, and you're barely meeting your rent
or mortgage payments, your credit score takes a nose dive. Even
if you are meeting all your payments, credit reporting companies
can show lenders that you are at your limit, that you're fully
extended on all existing lines of credit, and you've been
searching vigorously for more. This will be looked on very
poorly by lenders and make them much less inclined to lend to
you.
Between Jobs
One of the periods when you are most likely to be in this sort
of situation is when you are between jobs. There are a million
reasons why you might lose your job, many of which will not be
your fault, and if you are unlucky enough to have this happen to
you when you're under heavy debt, then things can quickly get
out of hand.
It may seem like stating the obvious, but the surest way to get
out of this situation is to find a new job as soon as possible.
In many cases you can be back to work within a month or two so
if you have enough money to keep you afloat for this period you
will be ok. However it is not always easy to find a new job
quickly, especially if the reason you lost your original job is
due to difficult conditions in your industry or area.
Insurance
The other thing you might consider is credit protection
insurance. This is an insurance policy you will need to have
taken out before you lost your job. If you did, there is a good
chance you will be covered for exactly this situation. Most
credit protection plans provide that if you lose your job
through no fault if your own, they will kick in the meet your
repayments for you, until you can get another job. They have
many strict conditions, for example, they will probably expect
you to accept the first job offer you get, even if it does not
pay as well as your last job etc.
Alternatives
The other option is to borrow some money to tide you over till
you get a new job. While it may seem unlikely that a lender will
lend to a person who is out of employment, there are situations
when they will lend to you. If you can demonstrate a good
previous repayment record, and have very good prospects of
finding a job soon, they may be willing to back you, especially
if you have security such as your home to offer them. If you do
opt for this route however, make sure you are very confident of
finding employment before putting your home at risk.
About the author:
Joseph Kenny is the webmaster of the loan information sites
http://www.selectloans.co.uk
/ and also
http://www.ukpersona
lloanstore.co.uk. At the Personal Loan Store you can find
some of the latest
se
cured loans explained in detail.
