Over the years, many people have found themselves in a situation where their credit score has gone through the floor. Some people experienced problems when the global financial crisis of 2008 took hold, resulting in job losses, financial problems, and misery for many people. Others have seen their credit score plummet due to factors such as losing their job, splitting up with a partner, taking on too much debt, or being unable to manage their budget effectively.
Now there is a whole new problem facing millions of households and individuals – the global COVID-19 pandemic. As a result of the spread of the infection, businesses around the world have had to close, albeit on a temporary basis. However, many of these businesses may be unable to cope with weeks of closure even with financial assistance from the government. So, ultimately, they could end up closing for good, which means that many may find themselves out of a job.
Impact Already Showing in the USA
The impact of business closures due to COVID-19 is already evident in the USA, with millions of people now turning to welfare due to unemployment. Of course, these are all people who have a range of financial commitments, which they were able to manage while they were working. However, without their income from work, many will find it impossible to keep up with these commitments.
This is certain to lead to a sharp rise in the number of people who have damaged credit, as they may struggle to pay bills, debts, and other commitments. This, of course, will make it more difficult for them to access financial solutions in the future. While there are options available for those with bad credit, such as companies that offer an auto loan with bad credit, it will still be an uphill struggle for many people to get back on track.
There is no doubt that the impact of the COVID-19 pandemic is going to have long-lasting effects in all areas of society. Many businesses will face huge losses while others are forced to close altogether. Many people will be nervous about going out again, even when lockdown restrictions are eased. And many people will find themselves queuing for unemployment benefit through no fault of their own, as they will lose their jobs due to business closures and cutbacks.
Getting back on track may be all the more difficult for those who are left without a job, as the large number of business closures could mean fewer employment opportunities. For those who have mortgages, bills, debts, and other financial commitments, the impact could be devastating, and their credit could take a nosedive. Even those who have always maintained excellent credit in the past may find that this is no longer possible.
Possibility of Homelessness
There are further concerns about the impact of the pandemic in terms of whether people will eventually start to find themselves without a roof over their heads. This could be the result of being unable to keep up with mortgage and rent payments due to loss of income.