Something should be said about living off credit cards. Don't borrow, or if you must, do it with care:
- Don't cash advance from your credit card. If you must, do it with one credit card, then balance transfer to another. Interest for cash advance is usually very high. But you need a balance transfer card, I doubt you will be offered one if unemployed.
As far as credit rating: the most important bills are loan payments (credit cards, car loans and mortgage). Forget about rent:
Maybe you need to break a lease- it's a good idea to talk to your landlord. You are better off telling them, than not paying. They might let you break it without dinging your credit. Really once they find out that you can't pay, they want you gone as fast as possible so that they can rent to someone else. If you miss payments, they are missing income, in theory a much worse situation for them.
While I didn’t personally experience this, my dad went through bankruptcy and fairly hard times after the ‘08 recession and I learned a lot.
Not all credit is made equally. Don’t mortgage your house to pay credit cards, you can default on them and keep your primary residence. Don’t pay off debt before you break into your 401k. 401k’s are off-limits to creditors. And if you can’t pay something CALL them sooner rather then later. Most creditors would rather let you miss a few payments than default. And lastly, prioritize keeping yourself healthy, fed, clothed, and housed if it comes down to it. Being honorable or maintaining a good credit score is 100% bullshit compared to your health and well being.
It depends on the situation: some people may be able to move back in with their parents. Better off doing this than ruining their credit rating- in three years they might be employed and trying to get a loan.
- Don't cash advance from your credit card. If you must, do it with one credit card, then balance transfer to another. Interest for cash advance is usually very high. But you need a balance transfer card, I doubt you will be offered one if unemployed.
As far as credit rating: the most important bills are loan payments (credit cards, car loans and mortgage). Forget about rent:
Maybe you need to break a lease- it's a good idea to talk to your landlord. You are better off telling them, than not paying. They might let you break it without dinging your credit. Really once they find out that you can't pay, they want you gone as fast as possible so that they can rent to someone else. If you miss payments, they are missing income, in theory a much worse situation for them.