Apply For Credit When You Do Not Need It

by Pam on March 23, 2011

When it comes to using credit, it is really important to always be thinking ahead.  Remember, when you need credit you won’t likely be able to get it, so when you are working full time and things seem to be going your way financially, this is the ideal time to be applying for credit.

Take Joe for example.  He is a 30 -year -old full time truck driver.  He is earning $60,000 per year and life is good.  He never bothers to apply for a credit card or a credit line because he is able to comfortably live off of his income.  Then, tragedy strikes and he gets laid off from work.  He soon depletes all of his excess cash flow and suddenly finds himself strapped for cash.

What does Joe do?  He goes to his financial institution to ask for credit to tide him over until he finds work again.  Unfortunately he doesn’t qualify because he isn’t currently working.

The solution?  In order to prevent this scenario from happening to you, not only should you be building up a healthy emergency fund, you should also be applying for a line of credit and a credit card when you are working and don’t really need it. That way, if something happens that significantly reduces your income for a while, you have a Plan B if your emergency funds become depleted.

If Joe had though ahead, he would be able to dip into this credit line for a while and still manage to pay all his bills.  Now he is frantically trying to find funds.  So although it may seem strange to be applying for credit when you really don’t need it, think of what may happen in the future and properly prepare for the unexpected.

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