Many of us, at a certain point of our lives, might have struggled with credit, and that might have been because we didn’t have experience with it or we simply didn’t know how important credit was or how to manage our credit, but during these days of health and economic crisis, it is important to know everything related to how to keep your credit in shape, maintain a good fico score and learn how to build it up in case you lost control.
The COVID-19 coronavirus pandemic has affected everyone all around the world. Extended isolation and sudden job losses have everyone thinking about their futures. Lots of people are concerned about losing a reliable income source during this time of crisis. Some have even been forced to shut their businesses down and are even filing for bankruptcy. The global pandemic has turned many people’s financial lives upside down.
But, as you work on keeping your bills in good standing and your finances going strong, you should also pay attention to your credit score. Even if you’re delaying some major purchases like buying a car or a home or going on a trip, you still need to maintain good credit. You’ll eventually start spending again, and you’ll need a good credit score to do it.
Keeping a good credit score is an important part of your financial health. You want a good score because it can unlock many savings and benefits for you and your family, including access to personal and business loans, and credit cards with the most favorable terms and interest rates which will save you money in the long run.
But how can you protect your credit score during COVID-19? Keep in mind that your credit score and report play a crucial role in your future financial opportunities. The following steps will be your handy guide in managing and protecting your credit score during this global pandemic.
- Talk to your lenders and creditors and see if any assistance is available.
- Pay what you can. To avoid having late payments show up on your credit reports, try to make at least the minimum payment on accounts, or pay any amount you and the lender or creditor agree upon.
- Stay up-to-date on your credit reports. You are entitled to a free copy of your credit report every 12 months from each of the three nationwide credit bureaus by visiting www.annualcreditreport.com. You can also create an account with the main three credit bureaus to get free credit reports each year.
- Consider adding a consumer statement to your credit reports. You can add a brief 100-word (200 words in Maine) to your credit reports to explain your situation.
- Live below your means. Don’t spend money you don’t have. Cancel expenses that are non-essential and spend only on what you truly need. This is a difficult time for everyone and we need to start making smart financial decisions that will help us recover financially in the future.
- Save if you can. If you still have a source of income, don’t hesitate to make payments on time, lower your credit card balances and save for the future. We never know what can happen next.
All the things mentioned above have one thing in common: All require taking a proactive approach to your finances and credit.
We all need to master our money management skills and put the best strategies into practice to protect and maintain good credit even if we are facing a financial crisis.