Economy is bad – know your credit score

I think we’re all aware now, that the economy in many places of the world has turned to crap. Greece is sinking, Spain has an unemployment rate of 25% or something along those lines, Portugal is not doing too good either as I understand, and recently it appeared that also Cyprus might be needing a little bit of help from the European Central Bank. So yeah, the economy sucks in many places.

Some of the “better off” countries, economy wise, United Kingdom, Germany and so on, has also been hit by the recession, although not as hard as some of the Southern European countries, it would seem. Still, lots of people lost their jobs – and jobs are still moving to cheaper countries in East Europe and Asia where labour is much cheaper. Unfortunately all of this means many people, or families even, might get into financial problems – or might already be there – when having lost their job and with no outlook to find another.

One of the bad things to do when you’re out of job, is to take a loan to pay for your living costs. It’s a never ending circle, you’re only making it even worse for yourself later on. I can only think of two examples of when it might be a good idea to take out a loan to make a living: 1) If it’s a matter of life and death here and now, or 2) if you have a guarantee that you will come by money in the near future, ie. you have signed a job contract or something like that.

With the recession and more people getting a bad economy, credit scores have become increasingly important for companies that does not wish to take on a “bad customer” who might not pay their bills or pay back their loan. This affects not only those people who are in a bad economic situation, but also “normal families” with normal economy, since basically everybody is subject to a credit check here and there. Today, in this digital age, it’s even possible to check my free credit score online if you live in the UK, so you will be able to know exactly as much about yourself as any financial institution does. That only seems fair, right?

Bottom line: The economy sucks right now, think twice about what you need to buy and don’t take out unnecessary loans or subscriptions, it might come back and bite you soon. Although, it’s important not to stop the wheels entirely, if everybody is just saving up and not spending, it’s going to take forever to get the economy up again. Someone has to take charge and get the wheels moving so everybody else will follow, it’s okay to buy stuff when you can afford it, but like mentioned, avoid taking out a loan unless you really need to. If you have money to spare, go out and buy something nice for yourself this weekend – if not, just hold tight, things will eventually get better 🙂