The Importance of Credit To The Journey After Diagnosis
While credit is important for everyone, it takes on a different meaning after a diagnosis.
Why Credit Is Important For Everyone
Credit can be a very good friend -- or a very unforgiving one. Credit is important because:
- Credit can provide access to cash when you need it most -- particularly for uninsured medical expenses, or to cover the increased living expenses that often accompany a health condition.
- Knowing you have access to financial resources if needed can help relieve the stress that can accompany living with a health history.
- You can get life insurance on your credit card debt even if your health prevents you from getting life insurance on your own.
- If you become disabled, credit disability insurance will make your minimum payments which reduces your monthly expenses and protects your credit rating.
- Many employers check your credit before hiring you. (Yes, you can still apply for a new job.)
- Your credit rating can affect the amount of your premiums for insurance such as homeowners and automobile insurance.
- Credit can help you afford major purchases.
- A history of using credit is usually necessary to get a mortgage.
- A good credit report is often necessary to rent a home.
It is probable that:
- If you have some credit, you can get more.
- If you don't have credit, you can still get it.
- If your credit isn't great, it can be fixed.
Why Credit Is Even More Important After A Diagnosis
For a Survivor, the key concern is primarily maximizing the amount available for borrowing instantly if needed, or for purchasing goods and services without payment right away.
- Credit can be a source of money if you become unable to work full- or part-time, or have extraordinary medical or other bills.
- In spite of a health history, credit can be accompanied by additional life insurance in the form of credit life insurance. Credit life insurance is often available through credit cards, or when you make a purchase on time, such as a vehicle or furniture.
- A credit card can also provide coverage in the event you involuntarily leave your job or become permanently disabled. This coverage is not as important to a person with no health history.
For the average consumer, credit is primarily about credit rating rather than the maximum that can be borrowed.
- Credit ratings are a short-hand method for describing credit-worthiness.
- Credit ratings can affect:
- The amount of money that can be borrowed
- How much interest will be charged on a loan
- Possibly how much will be paid for insurance premiums such as automobile and homeowners insurance. (auto, home, etc.), and
- Even sometimes whether the person will get a job.
- Excessive credit isn't good for the average consumer, because it can negatively impact a credit rating.
Ideally, unless you are at the end-of-life, save your credit for emergencies. It is better to accumulate the money you need for an item and then purchase it, rather than buy on credit. You'll have credit available for emergencies if you only use your card for convenience and pay your balance in full each month. Keep in mind that credit cards usually have a much higher annualized interest charge than almost any other form of loan.
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