Credit Score News, Tips & Advice
Website CertifiedPrivacy Protected
Credit Score News, Tips & Advice « Credit Scores > Credit Score News > Mecklenburg Unemployment Hits 11.7%, Credit Score May Suffer

Mecklenburg Unemployment Hits 11.7%, Credit Score May Suffer

By Sally Maison
Published: Sunday, September 6th, 2009

Mecklenburg County, North Carolina- The local unemployment woes continue as the unemployment rate rose up to 11.7 percent, one of the highest the county has seen in years. The employment problem started in the closing months of 2008 and has gone on 8 months hence. Just last month, the North Carolina Employment Security Commission recorded a total of 53,768 residents were unemployed. To aid unemployed residents, Mecklenburg was given $24.6 million worth of unemployment-insurance benefits. The benefits are aimed to help locals meet their daily needs and keep them from getting deeper into debt.

Mecklenburg Unemployment Hits 11.7%, Credit Score May SufferWhile unemployed locals worry about their financial future, credit specialists say that unemployment will not necessary hurt credit scores. Fair Isaac Company (FICO) has five main categories in computing credit score. They are: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and types of credit in use (10%). Unemployment is not a direct factor when it comes to credit rating. However, it can affect credit score indirectly. For instance, a consumer’s payment history may turn from good to bad when he keeps accumulating overdue payments because he has no money to settle his bills.

Heidi Berardi, vice president of Family Credit Management, advise consumers to find alternatives while going through unemployment. One solution, she suggests, is for jobless individuals to go to temp agencies. Temp agencies offer temporary works to skilled individuals. This will allow them to earn while looking for permanent jobs. She also tells laid off consumers to cut their “spending to bare-bones essentials.” She says the priority of people who are in between jobs should be their homes. They should cut off luxuries which include cellular phones, cable television, and Internet subscriptions. She even says that jobless consumers might as well consider selling their car. It saves on gasoline and insurance costs, which can greatly help in maintaining good credit score.

Getting a loan modification is another way to keep one’s credit score intact. One should notify his lender that he is out of job for the meantime and ask the lender if they can strike an agreement. Consumers should not wait for overdue bills, says Alan Cicchetti, commissioner of Connecticut Deputy Banking.

Creditors are encouraged to find as many ways they can to avoid acquiring more debt. Berardi adds that filing for bankruptcy should be the last recourse. A bankruptcy record will remain in one’s credit report for ten years and will greatly hurt a credit score. She continues that unemployed individuals should not be discouraged and should remain persistent in their purpose.

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.