Your credit is one of the most important items when it comes to your financial health. Even in the best of the times, maintaining healthy credit can be an overwhelming task, let alone during the economic uncertainties related to the COVID-19 pandemic, also known as the coronavirus disease. Business closures, government-mandated curfews, stay-at-home orders, unemployment claims, and more have resulted in financial hardship for many.
As the COVID-19 situation continues to evolve, it’s important that your health, safety, and families are your top priority. Fortunately, the United States Government, regulatory agencies, banks and lenders, and credit bureaus have all taken steps to try and help you make sure your credit isn’t impacted during this unprecedented time.
Here are the steps to protect your credit;
Obtain a copy of your free annual credit report. Under the Fair Credit Reporting Act (FCRA), each of the three major credit reporting bureaus – Experian, TransUnion, and Equifax – is required to provide you with a free copy of your credit report.
To order your free annual credit report, visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
- Ask your creditors and lenders about options. Though the Federal Government has stepped in to provide relief, as the COVID-19 pandemic continues to evolve many creditors and lenders have put their own hardship programs in place to help you navigate this difficult time. For any active accounts you have including credit cards, student loans, mortgages, auto loans, or other, reach out to find out if they have a program in place to help you with payments and provide an accommodation.
- Be wary of scams. In an unprecedented time where people are trying to find reliable information on how to protect themselves, there are others who see an opportunity to exploit that fear. The Federal Trade Commission (FTC) has shown a significant increase in coronavirus-related scams since January. It’s vital that you be diligent in finding reliable information from a trustworthy source. Falling victim to a scam can have long-term implications for your credit and can even result in identity theft.
- Budget and pay what you can. After you have checked to see if you are eligible for relief under the CARES Act or through a specific hardship program offered by your creditor or lender, do your best to continue making at least the minimum monthly payments. Continuing to make payments is the best route to ensure that your credit will not be negatively impacted during this time.
Use your stimulus check. Eligible U.S. taxpayers may qualify to receive up to $1,200 from the Internal Revenue Service (IRS) as part of the $2 trillion CARES Act. Not every taxpayer is entitled to a payment, and it’s important that you check your eligibility to see if you qualify, and for how much.
For those that qualify, use your stimulus check to pay your monthly payments, pay down your debt to increase your DTI ratio, or use the money to cover your day-to-day essentials so you don’t need to use revolving credit accounts which increase the amount of debt you owe.