Credit: Score, Getting, Fixing, Maximizing Use
"Credit" is the amount of money you can borrow from professional lenders such as credit card companies and banks, as welel as the amount of goods or services you can purchase without immediate payment.
Credit is particularly important to everyone living after a diagnosis of a serious health condition. Credit can be used to:
- Provide access to cash to pay medical expenses you have to pay yourself
- Pay increased expenses that often accompany a health condition.
- Provide cash in an emergency
- Alleviate stress by providing a financial cushion.
- Increase the amount you can leave to heirs if a credit card includes a benefit which pays off the outstanding debt in the event of death. (No health questions are asked on the application)
- Provide a benefit in case you become disabled and unable to work. Some credit cards even offer unemployment benefits.
While too much credit could hurt your credit score, maximizing available cash through credit tends to become more important after a serious diagnosis than a lower credit score. (You can also use the credit card as a source of cash through "Credit Card Checks" also known as "Convenience Checks").
Standard advice is not to use credit during the journey post-diagnosis unless you have to unless it is part of a plan. Too many people have used credit for fantasy end-of-life expenditures only to find themselves still here years later with a debt burden that is difficult to manage.
If you are overusing credit cards, there are tips to follow such as the simple step of leaving your credit cards home unless they're necessary.
You can get credit even if you have no credit history or a bad credit history. For instance, with a bad credit history you can start to rebuild credit by looking for a secured credit card. With a secured credit card, you put money into an account which serves as collateral for the credit.
Even if you have a good credit history, there are also steps you can take to make your credit rating better.
A credit score is the market credti card companies, employers and even insurance companies look at to determine your credit worthiness. You can get your credit score free of charge. For example, for a list of organizations that provide a free credit score, go to Consumer Reports.org and search on "free FICO score." You can also go to websites such as CreditSesame.com .
Given all the stories we hear about each day relating to stolen identity, it is wise to take simple steps to prevent other people stealing your identity and using your credit. That doesn't mean you have to pay for a credit monitoring service. These services are generally thought to be a waste of money since all they do is monitor your credit report. You can order your own reports for free once a year from each of the three major credit bureaus.Each of the three major credit bureaus also allow you to put a "freeze" on your credit. If a protection program goes further and checks additional records or sources, as well as reimbursement for any losses you suffer, the program may be worth considering.
If you want a new credit card, check for features you want - such as credit life insurance and/or credit disability insurance. Both policies are issued with no health questions asked. To locate a credit card with the feature you want, online web sites help locate credit cards and compare features (generally only at the same time as a new card is issued - or within a certain period of time after issuance.). .
NOTE: It is advisable to at least use a credit card every six months, or even better, every three months. Credit card companies have been known to close accounts because of inactivity. The closure can hurt your credit score which can impact your ability to get more credit, and other unexpected areas such as automobile insurance premiums. (The result of a closure is that you automatically increase the percentage of total available credit you are using. This decreases your credit score.)
For additional information, see:
- The Importance of Credit To The Journey After A Diagnosis
- New Uses Of Credit
- Credit Scores
- Additional Credit
- Managing credit cards
- Too much debt
- Identity Theft: How And Why To Protect Your Against Identity Theft
- States With Laws About Security Freezes On Your Credit
For information about credit insurance, including credit life isnurance and credit disability insurance, click here.
NOTE: An unpaid medical debt cannot be added to youir credit report for 180 days to allow time for insurance payments to be applied.