How To Protect Your Credit Score During COVID-19
3-minute readOctober 22, 2020
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COVID-19, also known as coronavirus, is spreading uncertainty and fear across the world. Unfortunately, our fears don’t end with the health implications of the virus.
Many of us also have to contend with financial fears, one of which is a potential drop in our credit score due to the COVID-19 situation.
We’ll take a closer look at how you can weather this storm while keeping your credit score intact.
Check Your Credit Report
It is always important to monitor your credit report on a regular basis. However, it is especially important to stay on top of your credit report during this tumultuous time.
With regular monitoring, you can identify potential mistakes before they negatively impact your credit score.
If you spot a mistake, reach out to the creditor immediately. They may be able to help you remove the mistake with minimal hassle. The longer the mistake sits on your credit report, the longer it can take to remove the bad mark.
Luckily, it is completely free to monitor your credit score. With Rocket HomesSM, you can monitor your credit on a weekly basis. You’ll have free access to your VantageScore 3.0®, plus a report from TransUnion® every week. If you spot a mistake, then take action immediately.
Make On-Time Payments
If at all possible, continue to make on-time payments throughout the COVID-19 situation. An on-time payment history is the best way to ensure that your credit score continues to grow.
However, that might not be possible if your income stream is affected. Without an income, it can be impossible to stay on top of your payments if you don’t have a solid emergency fund.
Luckily, there are other ways to keep your credit score on the rise.
Contact Your Creditors
If you’re unable to make on-time payments, then contact the lender as soon as possible. In many cases, the lender could offer financial assistance to help you survive financially.
Before you call your lender, prepare yourself to discuss the reality of your financial situation. You’ll need to share how much you can afford to pay and when you anticipate being able to resume regular payments.
In some cases, your financial situation may be considered a hardship. If that’s the case, then many lenders will be able to help you.
Many major credit card companies are helping customers affected by COVID-19 by waiving late fees and stalling interest charges. Check with your credit card issuer to find out more about the help they can offer you.
If you’re having trouble staying on top of your student loan payments, then you may want to think about a reduced or delayed payment plan. If you choose to pursue one of these options, then consider the fact that your interest may continue to accrue while you delay these payments.
The key is to reach out to your lenders. Many are willing to work with their borrowers on a case-by-case basis to find a solution that will work for both parties.
When you make the phone call, be respectful and appreciative of anything the customer service representative can do to ease your financial burden during this difficult time.
Consider A Balance Transfer
If you have a growing credit card balance that you’re unable to repay at this time, then consider seeking out a balance transfer option. With a balance transfer, you would move your debt to a card that offers a lower interest rate on that balance.
The goal of a balance transfer is to eliminate any extra interest payments on your current credit card debt. Instead of allowing your credit card debt to snowball out of control with high interest rates, you can at least halt the growing debt burden for now.
Although these low-interest rates are typically temporary, they can buy you the time you need to get back on your feet. Once you are able to, move forward with eliminating credit card debt from your life for good.
The Bottom Line
COVID-19 may leave some lasting effects on the economic picture, but it doesn’t need to impact your personal credit score. Take proactive steps to prevent any negative consequences for your credit score.
Take advantage of the free resources offered by Rocket HQ to help keep your credit score on the right track.
Rocket HQSM has partnered with CardRatings for our coverage of credit card products. Rocket HQ and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
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