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