Protect Your Credit Scores From the Perils of Unemployment

November 02, 2011

protecting credit scoresEven though the unemployment rate is high, your credit scores don’t necessarily have to suffer.

In “Don’t Let Unemployment Downsize Your Credit Scores,” the credit experts at FreeScore explain some of the reasons people who are unemployed often face credit problems. And with the broader unemployment rate hovering at 16 percent, these issues affect many people every day.

According to the article, your credit scores may take a hit if any part of the credit score equation is unfavorable. Your three credit scores are based on the following things:

  • Payment history: This accounts for roughly 35 percent of your score, since it shows how responsible a person is about paying off debts on time.
  • Available credit-to-debt ratio: You certainly don’t have to have a balance of $0 on your credit cards each month, but be careful about charging too much. People who face unemployment may watch debt start to pile up, which lowers your ratio of available credit. Because this ratio accounts for approximately 30 percent of your score, it’s easy to see why people in debt usually have low scores.
  • New lines of credit: You may feel the need to open up new credit cards to help pay bills and other expenses, but be careful not to go overboard. Roughly 15 percent of your score is based on length of credit history, and 10 percent is factored on the number of new credit lines opened in a period of time.

Even though it may seem tough, there are ways that you can take control of your credit. With FreeScore’s Power of 3, you’ll be able access your credit scores at any time from the three major credit bureaus; and you’ll get 24/7 credit monitoring and automatic credit alerts that let you know if your identity may have been stolen. With these tools, you can stay on top of your credit scores and rest easy knowing that your credit is protected against fraud and errors.

Categories: Economy

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

Leave a Comment