Creating an emergency response plan for your finances is key to saving your credit during times of flux, such as an extended period of evacuation due to a natural disaster.
Americans from coast to coast have spent the summer dealing with an unusually intense round of devastating natural disasters. While people are rightfully concentrating on rebuilding their lives after the loss of their homes and widespread destruction in their communities, having an emergency plan for how to deal with finances can help you stave off long-term problems.
Keeping up with your bills might seem like a low priority after a flood, a hurricane or a wildfire necessitates evacuation. But keep in mind, that’s also when you are most vulnerable and unlikely to notice any major changes to your credit activity. A long period of time away from home means that maintaining good credit can be instrumental in helping to successfully return to your life, long after an emergency strikes.
Here’s how to help create a sound emergency response for your finances:
Be prepared for an eventual emergency.
Centralizing and digitizing your financial contacts means you can be able to access that information when a disaster strikes. Going digital with your payments and using online portals to contact and make payments on your most critical bills can be instrumental in keeping in touch, especially as mail service is disrupted or if you’re forced to evacuate your home for long periods of time.
Contact your creditors as soon as you can.
Your safety is of paramount importance but once the danger has passed and you’re able to do so, make sure to contact your bank, mortgage provider or credit card company. Late payments can affect your credit score at a time when you need access to credit most. If it looks like you may be unable to pay certain bills for an extended period, discuss that with credit card companies or your bank. Look to make arrangements before your debt becomes late or delinquent and is turned over to a collection agency.
Once your debt picture becomes clearer, work on strategies for paying balances back down.
The debt snowball, where you focus your efforts on the smallest debt first while maintaining minimum payments on others, can give you some quick wins and motivation. With the debt avalanche method, you can make the minimum monthly payments on all your credit card accounts and apply any additional payments you can afford to the account with the highest interest rate.
Keep your credentials safe and be wary of scams.
Natural disasters and severe weather can create opportunities for fraud in their wake. Make sure you do your due diligence if you receive a phone call or email requesting your personal information. Then research the agency’s website and phone number to contact them directly.
Another way to be on alert is by monitoring your credit and personal information. You can use a service to monitor your credit and identity and alert you to new credit applications, major changes in your credit scores and other suspicious activities.