Protect Your Credit Scores During the Coronavirus Pandemic

Keeping track of your credit score is a task which should be undertaken even in the best of times. In the face of current economic uncertainties surrounding the coronavirus pandemic, good credit may have even more impact on your financial health.
It is important to have your score as healthy as possible in case you need to get a loan, a new or different car, or a credit card to get by. But for many facing layoffs or other income losses, the first step towards long-term healthy credit lies in figuring out how to stay afloat today.

debt relief and coronovirus pandemic
What Is Important About My Credit Score?
Two of the most influential factors that make up your FICO credit score are payment history and amounts owed as a percentage of total credit limit. On time payments and your balance of 30% or less gives you a healthier score.
These factors help lenders determine whether you’re able to make payments on time and in full, and you haven’t overextended yourself by taking on large balances you’re unable to pay off. They are indicators of your default risk on payments. Missing payments and using a majority of your available credit tell potential lenders that you may be at a higher risk of default, decreasing your score.
What Can I do if I'm Impacted by this Pandemic?
Reaching out to your credit card issuer should be your first response if you’re having difficulty making payments due to coronavirus.
Many issuers have already stated that cardholders should speak individually with a representative about their situation to work out a personalized solution. For instance,  cardholders may be granted options such as forbearance and credit line, and others are allowing cardholders to enroll to skip March payments without accruing additional interest.
If you’re not in immediate risk of defaulting on payments or you have the extra cash flow, now is the time to eliminate high-interest debts which may become even more burdensome as uncertainty continues.
Since credit card rates are generally much higher than rates on mortgages, auto loans and even student loans, credit card balances are those which could make the biggest difference in your total amount owed. Though the Fed cut interest rates to near-zero, credit card interest rates  are not expected to drop by a substantial amount.
As you accumulate any extra income or one-time cash payments (like a tax refund or bonus), consider putting it towards your balances and easing your highest-interest debt first and then other unsecured debt balances sooner rather than later.
Now is a great time to check your own credit report with a free service such as Credit Karma, to become familiar with where you stand and ensure the information is accurate.
Representatives from each of the three credit bureaus suggest that consumers financially impacted by the coronavirus pandemic consider adding a consumer statement to their credit reports making the circumstances clear to lenders. Under the Fair Credit Reporting Act, these consumer statements may be up to 100 words in length (200 for Maine residents). An example of this note might be, ‘I am unable to make payments because my employer has had to shut down due to coronavirus,’
What If My Credit Card Balances are Already Out of Hand?
Should you already be in a difficult financial situation before this current crises started, now may be the time to get help. Debt management, debt settlement, and debt relief programs are something you should be familiar with. They are not all the same. Find a Debt Negotiation service which is designed to maximize the monetary rewards for you as a result of collection or credit reporting law violations. The benefit to you is to work with a program which has an experienced legal team to maximize your savings.
Stay watchful and stay safe. You are never alone.


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