Since the beginning of March, COVID-19 has flipped the financial conditions of millions of people in the United States completely upside down.
Even if the economy is beginning to show indications of improvement, a significant number of people in the United States are still without jobs and are forced to use their savings to pay for the necessities of daily life. In light of this, the issue that has to be answered is how one may safeguard their credit score. Keep reading for some helpful hints.
• If you are unable to make a payment, you are required to get in touch with your lender as soon as possible. Your ability to make payments on time has the greatest influence on your credit score. A significant number of financial institutions continue to provide crisis assistance in the form of choices like deferral and forbearance, which might enable you to lower or postpone payments for a certain amount of time. According to Rod Griffin, senior director of consumer education and advocacy for the credit reporting firm Experian, if such terms are about to expire shortly, you should “contact your lender to explore what choices are available.”
• Investigate several means by which you might raise your credit score. Building credit might be difficult if you don’t have much of a credit history to begin with. Experian Boost, a free tool offered by Experian, may help rapidly increase your FICO score by providing you credit for on-time payments made to streaming services, phone companies, and utility companies.
You are able to handle your data with confidence and increase your chances of qualifying for better credit if you use an alternate form of financial data known as “consumer-permissioned data.” In point of fact, around two out of every three people who use Experian Boost notice an improvement in their credit score, with an average rise of approximately 12 points. When asking for a loan or other kind of credit, it is enough to make a substantial difference in the approval process.
• Give some thought to applying for a credit card that allows you to transfer balances or one that comes with a sign-up bonus. If you handle this situation in a responsible manner, it has the ability to boost your credit score while simultaneously providing you with either more time to pay off your obligations or a “welcome bonus” of maybe hundreds of dollars. Tools such as Experian CreditMatch may assist you in finding the most suitable credit card for your particular financial situation if you are interested in obtaining customised credit card possibilities.
• Make sure you are keeping an eye on your usage ratio. Your overall balance-to-limit ratio, often known as your “utilization rate,” is the primary factor in determining your credit score. Your total available credit will grow after you add a new credit card to the mix. As long as the total amount that you have available on your credit cards does not change, you will have a lower usage rate, which will likely result in an improvement to your credit score. Be careful to move balances to the card with the lower interest rate, and watch out for rates of interest that are only low for a limited time.
Even if a negative impact may be caused by having any debt, you should still strive to maintain your usage rate below 30 percent across the board and on each individual account. Trying to get the best possible credit score? “Keep your usage in the single digits, or even better, pay your credit card bills in full each month,” advises Griffin. “This will help you avoid the high interest rates that come with carrying a load.”
• Protect yourself from identity theft by keeping a close eye on your credit record. Since the pandemic began, there has been a significant increase in the number of fraudulent attempts made against credit cards and debit cards, as reported by the Federal Trade Commission. Since the pandemic began, consumers have lost more than one hundred million dollars as a result of fraud related to COVID-19.