LOUISVILLE, Ky. (WAVE) - In the midst of business closures and families fighting to make ends meet, you may be asking yourself, “Is it even possible to maintain a good credit score while you’re experiencing a reduction in hours or maybe even a job loss?”
Not only must we worry about fighting COVID-19, but millions of Americans must also worry that financial fallout from the coronavirus crisis will hurt their credit scores. The good news is there are things that you can do.
“Take care of yourself. Take care of your family,” stressed Rod Griffin, Senior Director of Consumer Education and Advocacy for Experian, the world’s leading global information services company. “Make sure you stay healthy. You make that the priority.”
When the emergency of this global pandemic has come to an end you also want to be financially fit. For some families that may take some work, or at least a conversation.
“You should talk to your lenders,” Griffin urged. “Let them know you are being affected by COVID-19.”
Calling lenders when you find yourself unemployed or when funds are low is not the easiest call to make. However, most major banks and credit card companies right now are offering some type of much needed debt-relief for consumers hit hardest by COVID-19. That simple call could be a financial life preserver right now.
“They can do things like put your accounts in forbearance or determent, which means no negative information will be reported until those time frames end,” Griffin explained.
Times may be hard right now but without a great score even good times can be bad. Holding on to your good credit score can help you win the best deals on loans, insurance premiums apartments and cell phone plans. Even utility services conduct credit checks and so can prospective employers.
A good credit score almost assures you can qualify for the best interest rates, and lower interest rates means lower finance charges or credit card balances and loans.
“Protect that credit history to make sure it’s there to work for you when we get through this crisis,” Griffin said.
Here are some steps you can take now to help keep your credit on solid footing:
- Call your lenders. Lenders may be able to temporarily lower your interest rate or payment amount or pause your payments for a period. If they can place your loan in deferment or forbearance, then you do not have to make loan payments during this difficult time and the lender will not report late payments to the credit bureaus.
- Check your credit regularly. Make sure your credit report is accurate. Make sure you check all three credit bureaus (Experian, TransUnion, and Equifax). Each bureau will give you a free report once every twelve months.
- Dispute any incorrect information. Make sure you check all three credit bureaus for the incorrect information and make corrections on all three if needed.
- Pay all your bills on time if possible, even if it is the minimum payment.
- You should also call your utility, cable, and cell phone provider if you know you will have trouble paying. There are often programs in place to help if you are in need.
- Only use your credit card when necessary.
“Just be aware it will cause your balance to increase as compared to your credit limits,” Griffin explained of credit card use. “That will hurt your credit scores for a time but once we’re back on our feet and we’ve working again you can pay down those balances and your score recovers.”
If you are in the midst of financial struggles, you may want to consider suspending nonessential services, cutting back on nonessential purchases like clothes and online items that you don’t need, and keeping the lines of communication open with lenders, creditors and service providers.