The coronavirus pandemic has you on lockdown, but this doesn’t mean your credit is automatically protected. Take these important steps to keep your credit healthy and safeguard your finances.
Monitor Your Credit Reports
You can’t fix something if you don’t know there’s a problem, which is why it’s important to monitor your credit reports regularly. Identifying inaccuracies or suspicious activity early will help to mitigate your exposure and risk.
The three major credit bureaus — Experian, TransUnion, and Equifax — are continually updating your credit reports, and you can see them at any time, and as often as you want, without impacting your scores. Streamline the time and energy it takes to review them by monitoring all three reports at once.
Dispute Wrong Information
While most of the world is on lockdown, that doesn’t mean cyberthieves are taking break from their crimes. If they’re successful with account fraud, identity theft or reporting errors, your credit scores can be significantly damaged.
If you see any suspicious activity on your reports, from misinformation to new accounts you didn’t authorize, file a dispute immediately. You can dispute online, by mail or over the phone with all three credit bureaus. And remember, disputing an item will not hurt your credit scores.
Don’t Skip Bill Payments
The COVID-19 pandemic has forced many people to lose income as a result of layoffs, furloughs or salary reductions. The consequence of this reality is that some people can’t pay their bills or have made the difficult choice to skip payments.
Unfortunately, missing payments, even during uncertain times, can have a dramatic impact on your credit scores. And if your account is flagged as delinquent, it’ll go into collections, which will have an even worse effect on your credit scores.
Whenever possible, it’s best to pay something on a bill that’s due, even it it’s not the full amount. However, if a loss of income means you just can’t pay your bills at all, communicate with your lender, creditor or service provider.
The key word here is communicate, and do it before the payment is late. All businesses understand the havoc the pandemic is causing on finances, and many have established policies to provide assistance.
Make Your Mortgage Payment
Missing a mortgage payment will also zap your credit scores. While millions of people are struggling to pay their mortgage, the good news is that many mortgage providers are offering assistance in the way of deferrals, forbearance, payment pauses or reductions.
As is the case with paying bills, you’ll have to be proactive in order to get mortgage assistance. Contact the mortgage assistance department for help (the contact information is usually available on the lender’s website), and be persistent because there are a high number of requests right now.
Keep Spending in Check
While it may seem that using your credit card right now is the ideal situation to not having cash on hand, it’s best to watch your spending. Your credit scores are impacted by the amount of outstanding debt you have, so don’t exceed 30% of your credit limit.
Ensuring your credit scores are as healthy as possible now will serve you in the long term. The lockdown is temporary, but negative credit marks will last much longer. Protect your financial health by making smart credit-related decisions today.