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The financial life of mankind has been hard hit by the Coronavirus pandemic. Millions of people across the globe have been laid off from work. The pandemic outbreaks have made business closures and adversely affecting the quality of life.
Due to the COVID-19 pandemic, 60% of Americans said their household income has been negatively affected. As an outcome, Americans struggle to pay their bills, loans causing a serious impact on their credit scores.
As Americans grapple with this pandemic and financial unease, this post will help you how to protect & boost your credit score throughout the COVID-19 crisis.
Check your Credit Report Early and Regularly
Have you checked your credit score recently? Checking and monitoring your credit score are imperative for the goodness of your financial life. It is imperative to check your credit score from the three Credit Bureaus – Equifax, Experian, and TransUnion. The three companies are also offering free weekly credit reports to help people protect their credit scores for the coming months. Being on track of your credit reports allows you to identify potential fraudulent activity and prevent further credit damage.
Know the New Guidelines
The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, is a law intended to address the economic fallout of the COVID-19 pandemic in the United States. If you have an agreement with a creditor for deferred payments, your credit score will not be affected, even if you are not making regular payments. This means you can remain in forbearance without any issues until the national emergency ends.
A minimum payment is better than a late or non-payment
Making regular payments on time is imperative. However, during the pandemic, it can be difficult to pay the bills as many suffer job loss and financial recession. Financial experts advise making minimum payments to avoid hurting your credit score. Additionally, keeping your credit card balances low can help limit the impact on your credit score.
Ask your lenders for deferment or reduced payments
It is a wise idea to get in touch with your lenders and ask about their deferment and forbearance policies. Many lenders are framing policies to help their customers and giving some extra time to settle the payments. Forbearance plans help borrowers to cease making payments or reduce the amount they pay every month for up to 12 months. Accounts account being reported as in forbearance or deferment will have no impact on the credit score.
Add a ‘consumer statement’ to your credit report
Similar to the natural disaster statements, your lenders can add a statement to your credit report which will reflect a deferment or forbearance. Customers have also the option to add their own statement which says ” I am affected by the coronavirus pandemic’. This temporary statement can help you when you apply for a loan in the future.