Unemployed? Here’s how to keep your credit score in good health

The importance of a good credit score cannot be overstated. It serves as an important factor in obtaining loans from banks and financial institutions when in need of credit.

However, keeping your credit score healthy is challenging, especially during periods of unemployment. Maintaining it while employed is tough enough, let alone when not working.

Yet, despite the difficulties, there are ways to improve and safeguard your credit score in situations when you are not employed. .

Review your credit report – Start by getting a free copy of your credit report from major credit bureaus like Experian, Equifax, and TransUnion. Check it thoroughly for any errors or mistakes.

Dispute errors – If you spot any errors on your report, such as incorrect late payments or accounts that aren’t yours, dispute them with the credit bureaus. Correcting these errors could potentially improve your credit score.

Timely payments – If you have existing debts like credit card bills or loans, keep making timely payments. Your payment history is a big factor in your credit score, so staying on top of payments is crucial, even if you’re unemployed.

Reduce credit card balances – Try to pay down your credit card balances as much as possible. High balances relative to your credit limits can hurt your credit score. Keeping balances low or paying them off entirely can help improve your score.

Avoid opening new accounts – While it might be tempting to open new credit accounts, try to avoid doing so if possible. Opening new accounts can lower the average age of your credit accounts and temporarily drop your credit score.

Build positive credit history – If you don’t have them already, consider options like secured credit cards or becoming an authorised user on someone else’s credit card account to build or rebuild your credit history over time.

Monitor your score – Regularly check your credit score and report to track your progress and catch any new issues or errors that could affect your credit.

Request a credit limit increase – You can ask your credit card issuer for a credit limit increase, which may help improve your credit utilisation ratio. Many issuers allow you to request increases online or through their mobile apps.

Published On:

Mar 25, 2024

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