(NU) - Since the beginning of March, COVID-19 has turned millions of American financial situations upside down.
While the economy shows signs of recovery, many Americans are still unemployed and must tap into their savings to cover basic living costs. To that end, the question remains: How do you protect your credit score? Read on for some tips.
• Contact your lender as soon as possible if you cannot make a payment. Payments on time are the most important factor affecting your credit score. Many lenders continue to offer emergency support such as deferral or forbearance options that may allow you to reduce or suspend payments for a fixed period. However, if those terms expire soon, you should "call your lender to discuss what options are available," says Rod Griffin, senior director of consumer education and defense at the Experian credit reporting agency.
• Look for ways to boost your credit score. If you have a limited credit history, building credit can be difficult. Experian's free tool, Experian Boost, can help you instantly boost your FICO score by giving you credit for on-time payments for utilities, phones, and streaming services.
This type of alternative financial data, known as "consumer authorized data", allows you to manage your data with confidence and benefit from better credit. In fact, two out of three Experian Boost users see an increase in their credit score with an average increase of around 12 points. This is enough to make a significant difference when applying for a loan or any type of credit.
• Consider purchasing a balance transfer credit card or one with an introductory offer. Handled responsibly, this actually has the potential to boost your credit score while buying you time to pay off your debts or get a "welcome bonus" of perhaps hundreds of dollars. If you're looking for customized credit card options, tools like Experian CreditMatch can help you get the right card based on your financial profile.
• Pay attention to your utilization rate. Your credit score is based on your total balance-to-limit ratio (also known as the "usage rate"). Adding a new credit card increases the total available credit. As long as your total credit balance remains the same, you would reduce your usage rate, which can potentially increase your credit score. Make sure you transfer balances to the lowest interest card and watch out for low temporary interest rates.
While any balance can drop your scores, you should keep usage below 30 percent, both overall and across individual accounts. Shooting for a Maximum Credit Score? "Keep your usage at single digits or, better yet, pay your credit card balance in full every month," says Griffin.
• Fight against fraud by regularly checking your credit report. According to the Federal Trade Commission, there has been a huge increase in credit attempts and debit card fraud since the pandemic broke out; Consumers have lost more than $ 100 million to COVID-19 fraud, so check it out
You can receive free weekly credit reports from Experian, Equifax and TransUnion through April 2021 by visiting AnnualCreditReport.com. Experian also offers a free credit monitoring service that includes real-time alerts, credit score monitoring, and an updated report every 30 days.
You must be logged in to post a comment.