How to Maintain Good Credit During a Lawsuit

The Importance of Credit and the Difficulties Created by Personal Injury

Good credit can get you far in life; just ask anyone who has bad credit. It’s not easy to maintain a good credit score, though, especially when you face unfortunate circumstances. It can be hard enough to pay your bills on time when everything is going right. It’s nearly impossible to do it when you can’t work.

People involved in personal injury lawsuits often have trouble making ends meet. Even if their injuries aren’t severe enough to prevent them from working, the stress and time commitments of a lawsuit can be draining. Now imagine trying to do the same thing, only you have no income because you were too badly hurt. Here are some tips for keeping your credit score solid (and maybe even increasing it) while dealing with a lawsuit:

Credit cards aren’t free money

Sure, they’re convenient, and some of them offer interest rates that aren’t insane. Mostly, though, credit card companies profit off their customers due to either overzealous spending or desperation. Even if you pay off your balance every month—something quite a few people can’t afford to do—it can still damage your credit if you spend near your limit.

Part of maintaining good credit card habits is knowing what should be put on a card and what shouldn’t. Can you pay a bill online or by check? That’s preferred. That monthly cigar club sounds good, but can it wait until you’re in a better financial position? Stay savvy with your cards; use them sparingly and only when you know you can pay them off.

Lastly, try using online resources to help you save money or earn points. NerdWallet does a great job of helping you choose cards that are right for you.

Watch where you use your cards

If a credit card company thinks you might have financial problems looming, it might become concerned, which could affect your credit rating. Using your cards at certain places can indicate to your credit card company that trouble is on the horizon. Avoid using your credit card for a divorce attorney, for example, as it is a red flag. Using one at a pawn shop could be another. If you can pay for these expenses from your checking account, do so.

Keep diligent track of your credit

There are sites out there that give you free credit reports, and the three major credit bureaus (TransUnion, Experian, and Equifax) all offer one free report a year. Examine these reports closely, as there could be errors in them. Maybe you moved, and a large bill was sent to an old address and never reached you. You may not know you were delinquent for six months, and your credit might have already tanked as a result. These problems can often be fixed, and your credit returned to where it was after only a few calls. This is a good habit to get into.

Most importantly, always try to pay bills on time

This can’t be stressed enough. One easy way for your credit score to plummet is through late payments. Even a one-time missed payment can be detrimental, and if you have several all at once, that is even more problematic. Some lenders may look at your history and say, “Well, she was doing great up until this past year, so we’ll give her a pass,” but many won’t. They’ll see a failure to pay on time as a problem.

What if you can’t afford all of your bills during a lawsuit? Let’s say you were in a third-party accident at your job and had to have surgery. This put you on the shelf for three months, and you lost plenty of income during that time. You may see some of those lost wages come back when your case settles, but that could still be months or even years away.

Fortunately for those in that situation, companies like Uplift Legal Funding exist. Uplift considers your case and approves you for money that you can use now to pay off your bills. This way, you keep your credit pristine even when you don’t have enough income to support yourself. You pay them back out of your lawsuit settlement. Better yet, you don’t have to stress about owing them if you lose your case. If you lose, you owe nothing.

Their rates are low, so you aren’t paying your whole settlement back at the end. The less you have to worry about every bill, the better it will be for your overall health. What’s more, it can even help your credit score!