How job-seekers should manage their credit


People looking for work actually have to juggle two major jobs at once -- finding employment and keeping themselves financially afloat. Those are big balls to juggle when compared to the relative luxury of being an employee holding onto a job these days.

One big thing to focus on during your phase of unemployment is managing your credit wisely. Ken Lin, CEO of the new credit-score tracking company CreditKarma, offered some advice about that topic on the blog LivingAlmostLarge. While I agree with some of his tips, others I would totally stay away from.

Lin's first tip is finding out what credit is available to you. One of his suggestions: "If you have a home, you should research the amount of equity you have in your home and consider opening a home equity line of credit."

That's a possible step to take before you lose your job, but not after you've lost it. Why? You most likely won't qualify if you don't have a job, especially during these times when skittish lenders often aren't lending to people who are still employed. And even if you do qualify, expect to be charged a whopping interest rate. Many financial experts say a HELOC is the last of the last resorts.

First thing first, cut expenses like premium cable, lattes, filet mignon, etc. Then the next step is to go into your rainy-day savings. Only then should a HELOC be a possibility, but just for necessities, not the "wants" like vacations and dinners out. Here's a Bankrate story that covers this in more detail -- it's from 2005, but the advice is still relevant today.