Is Sometimes Sacrificing Your Credit Score The Lesser of Two Evils?

PennyGem’s Chloe Hurst helps you navigate the times it’s ok to hurt your credit score.

Transcript

00:00Financial gain may occasionally stem from pain, and this is especially true in regards

00:08to your credit score. Here are a number of ways NerdWallet suggests sacrificing your

00:12credit score may be integral to your overall finances.

00:16That emergency fund you've been trying to build may not yet be enough to cover your

00:20unexpected expense. Use your credit card to cover your emergency expense, and if you do

00:25so, try to pay it off every month or keep balances below 30% of your credit limit. When

00:32help is on the way, or in this case money, it's okay to step into over-reliance on credit.

00:37If your income is imminent but your bills can't wait, sacrificing your credit score

00:42is certainly better than not being able to cover essential expenses. Types of incoming

00:46payments include a tax refund or payment for freelance work.

00:51For the brave and bold embarking on a new adventure, starting or investing in a business

00:55is another perfectly acceptable time to use your credit. Sacrificing your score doesn't

01:00come without risks, so keep the risks in mind and only do so if it's the lesser of two evils.

01:06The balance reminds you the following can lead to side effects of negative credit. Paying

01:11late or not at all, defaulting on a loan, high credit card balances, and filing bankruptcy.

01:17If you can avoid the sacrifice, definitely do, but otherwise just be smart when you do.

01:25For more information visit www.FEMA.gov