The COVID-19 pandemic has impacted the financial security of millions of Americans. A sudden loss of employment, closure of a business, or decrease in wages can leave one wondering how to manage their financial obligations. Many are struggling to pay a mortgage or rent, let alone their credit cards, in time. But even with all the current challenges, there are ways to protect your credit score; here are some helpful steps you can take.
Pay the Bills on Time
Even if you can only afford minimum payments, make sure to submit them by their monthly due dates. You’ll avoid negative effects on your credit report, as well as late fees. If you’ve missed payments in the past, do your best to pay consistently, as missed payments affect your credit score less over time. If the amount you owe is affecting your score, you have direct control by working to reduce the debt.
Contact Your Lenders
Inform your lenders if your financial situation prevents you from paying bills on time. Many lenders are extending hardship options to borrowers. Some options include temporarily pausing your payments or lowering your interest rate. For example, a loan can be put into deferment or forbearance. A lender won’t report late payments, and your credit score won’t be as impacted, especially if the account is in good standing. If you’ve been affected by COVID-19, be aware of protections in the CARES Act to help your credit score; although the original credit report moratorium may have expired, your lender may still offer help.
Check Your Credit Reports
The accuracy of information is important. If there are any errors or fraudulent activity, your credit may be damaged significantly. The three main credit bureaus—Experian, TransUnion, and Equifax—maintain credit reports. You can now access weekly online reports from these agencies through April 2021. These can be accessed via AnnualCreditReport.com. And, when you find information that doesn’t match your records, you can dispute it with each credit bureau; Experian has an online dispute center that makes this fast and easy.
Protect Your Identity
Identity theft has increased during the coronavirus pandemic, as have scams to obtain personal information. Revealing personal details can allow hackers to access your credit card accounts, transfer bank funds, and illegally borrow money by impersonating you. Be extra vigilant about websites and emails asking for personal account numbers and other details. If you believe identity theft has already occurred, you can freeze your credit to prevent others from using or applying for credit in your name.
Add a Consumer Statement to Your Credit Report
The details in your credit report aren’t only from your creditors and lenders. You can add up to 100 words, which can be used to explain your financial situation. This is especially helpful if COVID-19 has had specific unique impacts on your finances.
Create a Budget
Track how much you are earning and spending. If possible, trim expenses where you can and put more financial resources into paying down credit card debt. Budgeting can make sure you have enough funds each month to pay your creditors, and thereby protect your credit score.
Obtain Professional Assistance
A financial professional can help manage your debt by offering advice and creating a plan. But if there is an issue with your credit report, American Credit can fix your credit through a specialized pre-litigation process that ensures all information is reported in accordance with the law. Our process can help raise your credit score if you’ve dealt with a range of common credit issues. To learn more or receive a free consultation, call 855-274-1732 today!