If I’ve Been Impacted by a Natural Disaster, How Does It Affect My Credit?

A natural disaster can strike without warning and can have a huge effect on your life. Whether you’ve experienced a flood, wildfire, tornado, or hurricane, it can threaten your income and make it hard for you to pay bills. It’s natural to ask, “If I’ve been impacted by a natural disaster, how does it affect my credit?”

After a Natural Disaster 

A weather-related disaster may cause you physical harm or destroy your home or some of your possessions. If you’re injured, it may hurt your ability to work and reduce your income, and the same thing can happen if your workplace is destroyed. If your income has been affected, you might find it’s harder to pay your bills on time, including your mortgage or rent, student loan payments, or credit card payments.

It’s not unusual for people to rely on credit cards to try to make ends meet after disaster strikes. You may also end up with extra expenses such as paying to replace a damaged vehicle or paying a contractor to repair damage to your home.

Impact on Credit

If you rely on credit cards to pay your bills during this time, you’ll probably go above the recommended 30 percent utilization of your available credit. As your debt accumulates, you may begin to have trouble paying your monthly payments, or you may forget to pay one or more bills because you’re preoccupied with what has resulted from the natural disaster.

As debt accumulates, you may be faced with accounts in collections or a home in foreclosure. This can lead to negative marks on your credit that may take years to recover from.

What to Do if You’ve Been Impacted by a Natural Disaster

It’s a good idea to be as proactive as possible about protecting your credit. Contact creditors before payments are due to let them know what has happened. They may be able to offer hardship options that relieve some of the stress you’re experiencing. For example, they might be able to allow you to defer payments on a short-term basis or reduce your interest rates. If you have student loans, you may be eligible for deferment.

Be aware that identity theft can be a problem faced by people who are victims of a disaster. Thieves sometimes prey on people whose lives have been turned upside down. Get a copy of your credit reports and make sure there’s nothing suspicious being reported, such as accounts you don’t recognize.

Repairing Your Credit

Whether you’re trying to straighten out errors on your credit report or you’re rebuilding your credit after it was affected by a natural disaster, Dovly can help. We are an AI credit engine and we’ve disputed errors for thousands of people, helping many to improve their credit scores. You won’t need to worry about checking your credit every month because we can monitor your credit 24/7 on an ongoing basis. Try it risk-free with our free membership tier.

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