Originally Posted by
azmia
Exactly, financial situations can happen to anyone. It use to be that 3 months worth of savings would keep you out of harms way. Not any longer. Unplanned situations happen to everyone, but those of us who have had major setbacks, not because of our spending habits, but because of situations out of our control, end up on the short end of the string. With the costs of medical insurance now, most people have no or sub-standard medical protection. Catastrophic illnesses will wipe out a nest egg very fast.
As one poster stated, there are those out there who declare bankruptcy for 10k worth of bills. That was never what that program was set up for. It was to help those who are truly in need find some relief in their situation. The 'unspoken' penalties which credit companies put on you years later, are unfair, and unjust. While your FICO score is everything to a banker, there is no room for an explanation of what really happened to cause the situation to being with. If you need to apply for credit, you will usually end up with a form letter stating that your credit was denied.
Not everyone has bad spending habits, as I posted before and rvalreadydang, No offense intended, there are those people out there who through no fault of their own end up in a situation similar to yours. I guess I should have continued on my post a bit more. So sorry.
Yes, canceling credit cards is the fastest way to see your Fico score fall. But using them to the hilt is also another way to watch it fall, and to find yourself in a bit of a problem situation. If you notice the more you use your CC the higher your balance will begin to climb. Especially if you are paying more on your cards than the minimum. We actually had to call the bank and tell them to take an increase off one of our CC when it got up to 8k. That is way too much to owe any blood sucking institution, that charges usury interest rates.