A natural disaster such as a tornado or an accident like a fire can do a number to your home and finances. Repairs can cost you a lot of money, and getting your life in order after this situation can cause you to forget other financial responsibilities, such as paying your bills on time and making sure your credit score stays intact. Here are a few tips to help protect your credit and finances after a natural disaster:
Alert creditors to your situation
Once you figure out your financial situation post-disaster, get in touch with creditors as soon as possible and alert them to what happened. In instances such as the occurrence of natural disasters, creditors may waive late fees and other charges. Make sure you keep in constant contact with them because they could help you out with other situations, including payment moratoriums or extra financial aid.
As you are talking with your creditors, explain to them fully how the disaster has affected you, such as the power being down in your area or your home being so damaged that you had to stay in a hotel. The more specific you are, the better you are helping your situation. Also, be sure to document all the discussions you have with the representatives. If the financial institution grants you extra aid, puts a hold on payments for a few months or says that your credit score will not be affected during this time, you want to have a record of those agreements.
Get a hold of your credit report
Another important step on the road to recovery is to access a copy of your credit report. If the damages to your residence require expensive repairs, chances are you may be using a lot of your savings and credit to pay for everything. Seeing your credit report will alert you if any of your debts have gotten out of hand during this time and help you figure out why your credit score has dropped. If you need to apply for aid or discuss financial relief with your insurance company, you can show them your credit report and say that the natural disaster caused your credit score to drop, not your financial mismanagement.
Simply showing your credit report to a credit card company or your insurance company may not help you get financial relief. Instead, it's best to also explain how the disaster financially affected you. Writing a brief statement regarding why your debts and score appear negative won't do much to repair your score, but it can show creditors that you are a responsible borrower.
Create a tight budget
Repairs can be expensive and you don't want to sacrifice your credit score and credit card balances to pay for them. To help avoid overspending, make a post-recovery budget for the next few weeks. This should be tight, as you are looking to save as much money as possible during this time.