How to Handle a Financial Emergency with Bad Credit

Financial emergencies arise from a variety of circumstances and often cause severe distress. An expense like a car repair, medical bill, or appliance repair can quickly outstrip household savings. A job loss or income cut often makes paying essential bills impossible. For millions of Americans, turning to credit cards, home equity loans, or bank loans provide the needed funds.

But what about the millions of people whose credit scores make those options difficult to impossible? A financial emergency with bad credit can make it feel like there are no good alternatives. Often, people feel like they will have to go without, even if that means having no car, no electric service, or putting off important medical treatment.

When you need the essentials, don’t let a financial emergency with bad credit make you think you must go without essential goods and services. Financial experts recommend several methods of raising money that can help people get through a cash crunch no matter their credit rating.

Cash Advances

Those with less than perfect credit have options for short-term loan solutions in the form of alternative loan options for bad credit history. These cash advances provide emergency funds that can cover an overdue utility bill or the cost of filling a cavity. A cash advance saves you money because you avoid a utility disconnect and reconnection fees or a cavity that grows worse and requires a root canal. These short-term loan solutions provide cash in as little as a day. Many cash advances can be completed online. The cash is then delivered directly to your bank account.

Use Savings

If you are in the midst of a financial emergency, this advice doesn’t help unless you already have some money set aside for a rainy day. Even if you have little savings, use it to your best advantage possible, covering the most important items first. Also, to make your savings stretch further, try to negotiate lower bills with all of your creditors and household suppliers.

Individuals with bad credit should prepare to pay cash during emergencies. In a time where so many people live paycheck to paycheck, this can be challenging. One way to fit savings into your budget is to avoid eating out and to buy foods at the grocery store that require some preparation versus convenience foods. Reducing the cost of cable by ordering streaming services can help. Also, make a habit of banking any money you save as a result of discounts and sales, as well as your change. It all adds up to make your life easier when an emergency hits.

Extra Income

A little extra income goes a long way, especially if you are short on cash and have outstanding bills. Many temporary agencies hire part-time workers for events and special projects. A second job can provide a steady income stream to handle financial emergencies, pay down debt, and build savings. Do you have any unique skills that can help you earn extra income? For example, home repair, auto repair, or computer consulting all provide skilled individuals with lucrative side hustles.

Selling Possessions

No one wants to sell items of sentimental value; however, we all have things we don’t really need that aren’t sentimental. Take an inventory of what you have, such as books, old electronics, or a computer you don’t use anymore. Many of these items can be sold to raise some extra cash that helps you breathe easier.

When you have bad credit, a financial emergency can seem overwhelming. By utilizing savings, taking a bad credit cash advance, earning some extra income, and selling items you don’t need, you can handle the emergency. In the long run, you may find that it works out better than if you put that expense on a credit card.

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