Protecting your credit score
during the pandemic of 2020 is definitely challenging. With widespread unemployment, income loss, and people out of work due to social distancing measures, many Americans are worried about how the current state of the economy will impact their finances long-term. The uncertainty of things might have you putting off big purchases for now, but you’ll want your credit score to be ready should you need it in the future to buy a house, a car, or secure a loan. Here are a few ways to protect your credit score now so you can assure more financial opportunities in the future.
1. Watch Your Credit Report Closely
Even during better economic times, it is important to keep track of your credit report. Signing up for a free credit monitoring service can help you stay on top of your report and score. Through April 2021, the top three credit bureaus are offering to allow consumers to access their credit reports for free every week. By keeping up with your credit report from week to week, you can make sure your lenders are following any agreed upon accommodations and that your identifying information has not been compromised.
2. Keep Up with Your Payments as Long as Possible
A late payment
here or there might not seem like a big deal, but these negative marks on your credit report can cost you big time later. Late payments can stay on your credit report for up to seven years. For this reason, it is important to make your payments on time and in full for as long as you possibly can. If you know you are struggling and may not be able to make the minimum payment on time for an account, contact your lender immediately. Many lenders are being proactive and offering extensions, interest rate reductions, forbearance, and other flexible options for those impacted by COVID-19. Make sure you get written confirmation
of any agreement made with your lenders.
3. Understand Your CARES Act Protections
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides consumer protections to help you maintain your credit score through the pandemic. Some agencies and companies that report borrower information to credit bureaus have to follow specific requirements during this time. If you request special accommodation under the CARES Act, your creditors will report your account to the credit monitoring agencies based on your credit score at the time the accommodation took effect
. As long as you are working with your lenders and sticking to your agreement, your credit score should be minimally impacted.
4. Protect Your Identity
This is always crucial, but amid a global pandemic that has seen a rise in identity theft scams, it is more important than ever. Hackers and cybercriminals can use your information to open accounts and access new financial resources. If unchecked, this can have a major negative impact on your credit score. Much of the damage is reversible, but it will cost you time and money. This is why it is worth it to sign up for a credit monitoring service to ensure you are on top of how your information is being used.
It is more important now than ever to be proactive about protecting your finances. If you are worried about falling behind on debt due to the COVID-19 pandemic, Veitengruber Law
can help. After consulting with you, we'll suggest debt management solutions that are tailored to your unique situation to help you get through the pandemic.