If your boss calls you into his office, you might believe that he has good news to share. This is especially true if you’re doing a stellar job at work and he’s pleased with your performance.

But given present economic conditions in the world, being called into your bosses office doesn’t always suggest a pay increase or a promotion. The truth is, many companies are struggling; and in order to keep their heads above water, many have had to lay off some of their personnel — including a few top players.

There’s nothing fun about losing your job, and you may immediately think about all of your monthly financial obligations — perhaps your mortgage, an auto loan, student loans and other living expenses. In all likelihood you’ll qualify for unemployment, and depending on your company, you might receive a severance package. However, the money received may not be enough to cover living expenses. To stay financially afloat, you might use your credit card to pay bills and purchase the things you need.

If you’re able to secure another job quickly, using credit may only be a temporary annoyance. But since it can take on average 7 to 12 months to find a job when unemployed, using your credit card to cover living expenses can dig a deep hole. As you watch your debt balance increase each month, you may stress about your credit score and wonder whether you’ll be able to make your payments.

Credit and financial problems are two of the biggest consequences of losing your job. But rather than become discouraged and frustrated, explore different solutions to reverse your situation. Here are four practical way to deal with credit issues after a job loss.

1. Discuss the situation with your creditors

Notify creditors of your job loss to protect your credit score. If you feel that you might fall behind on your payments, speaking with your creditors and explaining the situation helps. If they’re aware of your present economic situation, they may offer provisions to keep your account in good standing. For example, your creditors may lower your interest rate to reduce your minimum payments, or offer forbearance and suspend payments for a specified number of months.

2. Sacrifice and pay the minimum

If your credit card debt steadily increases, paying just your minimums will only put a small dent in your balance. However, paying your minimum is better than paying nothing.

Minimum payments are typically 2% to 3% of the outstanding balance. It’s always smart to pay credit card balances in full each month to avoid debt; yet, paying the minimum is enough to keep creditors off your back and maintain an acceptable credit score.

Depending on your cash flow, affording your minimum payment might require sacrifice on your part. For example, you may have to give up cable, cancel your landline phone, or even reduce your transportation and grocery budget to ensure there’s enough money to pay bills.

3. Work with a credit repair company

If you credit score takes a serious hit after a job loss, working with a credit repair company like Lexington Law can get you back on track. Understand, however, that these companies cannot remove legitimate negative items from your credit report. However, if your credit report has costly errors, such as late payments or a collection account, credit repair companies are highly successful with getting questionable items off credit reports.

4. Use your tax refund

It’s tax season and if you anticipate a sizable refund, there are ways to put this money to good use. You can use this money to cover some of your living expenses while you’re out of work. But if your unemployment check and severance covers the majority of your household expenses, use your refund to pay off debt accumulated while unemployed.

This is undoubtedly a scary, frustrating time. However, panicking will only worsen the situation. If you notify creditors of your situation and adjust your spending accordingly, you can survive this temporary financial setback.

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