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Protect your credit when disaster strikes

  Fri, Jul 07, 2017     written by : CSF-Team
Protect Your Credit

How true is the statement that "future is uncertain". No one knows what is in store in the next moment. One's finances are the first things that go for a toss when the times get tough. While one can seek help from friends and folks during these difficult times, what does one do when a disaster strikes? Everyone is equally impacted and seeking help may not be feasible. Protecting one’s financial life becomes a critical need.

  • How does one ensure access to his own money?
  • What happens if the repayment on loans or credit cards does not happen?
  • What impact one’s decisions have on the credit worthiness and access to loans in future?

These are a few concerns that may cross one's mind with the thought of getting impacted by a disaster. What should one be doing to be able to protect the financial and credit life? All of us know that credit forms a highly important part of our financial lives today and segregating it is almost impossible.

Following are a few suggestions on what one could do to protect the credit when a disaster strikes.

Online access

Every financial institution has a BCP (business continuity plan) in place that helps them to extend seamless service. In case you have memorized your passwords and ids, it will help in having access to your own funds in short term.

Inform the lenders

This should be the first thing to be done. Once you are out of danger and have been able to secure a safe place, you must inform all your lenders. Most of the lending institutions may be ready to give some holiday in such a situation and work out a deal for you. This will help in getting to manage your funds and finances and deal with the after effects of the disaster.

A few lenders may even have some insurance cover as well for such a situation. These covers can come really handy in dealing with the losses.

Beware of scamsters

At the time of natural disasters, rumors and scams take a momentum. The criminals and fraudsters try to take advantage of the situation by sweet talking the victims into scams. You need to stay alert and exercise caution while dealing with unknown people who come forward to help. Not everyone who steps forward for help will be with a malice intention, but one needs to protect against the real scamsters. A cautious approach is the right way to deal with strangers.

Prevent identity theft

It is important to check if all your documents are in order. In case of loss of important documents, it is advisable to file a formal complaint with the police. This will only help in mitigating the risk of the global menace and new age crime called identity theft. Identity theft is a situation where a fraudsters uses your identity to have financial gains. This can lead the imposer to get loans issued in your name. It will lead to impacting your credit score and lead to situation where you are not left with much options but to look out for loan for low CIBIL score.

Report loss of cards

You must report loss of both credit and debit cards to the bank immediately. This will ensure that the cards get blocked and do not get misused. At the end of the day, reporting this as soon as possible is only going to help you in long run and save a lot of heart burn.

Do not forget the due dates

While you take all above steps, do not forget the due dates for all your commitments. Try to resume your repayments as soon as possible. Repay of obligations after all is your responsibility. Further you stretch resumption of repayment; further interest gets accrued on the outstanding amount.

Prolonged non-payment of the dues will only have negative impact on the credit score and will lead to your looking for ways to increase CIBIL score over a period of time.

Final words

Protecting one’s finances is critically important and it is advised that while one needs to take due measures post such a disaster, a proactive approach will only help. Investing into insurance covers that protect you against such perils is highly advised. It is better to be safe than sorry.