Summary
- If you are seeking payment deferments, make sure you get agreements in writing from your lenders.
- Protecting your credit score and credit report is your responsibility. Monitor your credit report on a regular basis to make sure there are no errors.
- Monitor all three reports from Experian, Equifax, and TransUnion.
- If you are concerned about your finances, contact your creditors and set up some type of payment schedule.
Your credit score is extremely important and can be a valuable asset for securing credit lines and loans, especially during times of economic uncertainty. Even if you have experienced a loss of income or have accumulated more debt as a result of the COVID-19 pandemic, there are actions you can take to help protect your credit score:
- Get relief agreements in writing: If you are looking for temporary relief, you must first contact your provider to discuss an agreement. Skipping payments without an agreement in place could result in a negative impact on your credit score. Your payment history generally accounts for 35% of your score. If you are concerned about paying your bills, one of the most beneficial actions you can take is to contact your creditors and work out some type of payment schedule.
- Monitor your credit and dispute the errors: Error correction is a simple way to improve your score, and it’s key that you monitor your report on a regular basis. And, if you find yourself unemployed, you don’t want to compound the issue with errors. Become familiar with your credit reports by checking all three bureau reports (TransUnion, Experian, Equifax) regularly to better spot and report any errors that could harm your credit reputation. If you do see an error, contact each bureau to dispute inaccurate information. Credit Sesame can be a free valuable resource to help you monitor your finances during these uncertain times.
- Have Cash in Reserve: As you can, build an emergency fund so you have access to cash and prevent adding more charges to your credit cards. You can also use some of this cash to pay down debt to free up some of your credit and improve your credit usage. In addition to setting aside cash from your income sources, you can contribute to your emergency fund by seeing if you have any unclaimed money. Visit the National Association of Unclaimed Property Administrators website, and enter your name and state.
- Request a Limit Raise: If you are employed, another easy way to raise your score is to request a credit limit raise. You can go to your credit card provider and ask for a credit line increase, which typically bumps your score because you’ll lower credit utilization with responsible use. Just be sure to ask if there’s a hard pull credit report involved before you request the increase (which can hurt your score if you have a short credit history).
In addition to the tips above, Credit Sesame can be a free valuable resource to help you monitor your credit score during these uncertain times.
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