Keeping your credit report in good standing these days might be tough for some. With people loosing their jobs all over the country due to the real estate sector and energy costs, you might find yourself tapping your savings to pay bills. Most of us are taught to save at least 6 months worth of savings in case of job loss or some sort of emergency.
Once you have used up your savings account now what? If you have saved money over the years in a 401k it might be better to borrow against it and pay yourself back with interest.
If you have found yourself in financial trouble, going to the bank to get a un-secured loan can be tough and costly. If you have got credit card debt, any financial advisor will tell you to pay off your credit card debt first. The best way to pay off debt or get out of trouble is to borrow it from your 401k and pay yourself back.
Ideally you should save up 6 months worth of income in your interest bearing checking account. This checking account could be a money market, or a high yield checking account. With the market not looking attractive currently, banks are offering decent interest rates to put you money in the bank with them.
Regardless of your situation we all need to save for a rainy day. If you have a 401k or a savings account, it usually better to borrow from yourself than a bank charging high interest.
When that rainy day comes you will have the money to keep your credit score in good standing.
“Remember your credit is your life”
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