Tips For Protecting Your Credit Score During COVID-19
5-Minute ReadUPDATED: October 30, 2023
Originally written: May 27, 2020
The National Emergency Declaration ended in April of 2023 and any protections under the CARES Act are no longer available. For any account specific questions regarding credit protection or payment relief, please reach out to the creditor or lender of your account.
The COVID-19 (coronavirus) situation has us all thinking quite a bit more about our health and safety. Our priorities are always the well-being and protection of ourselves and loved ones. However, financial health needs almost as much attention, particularly when the actions taken to combat the virus have caused knock-on effects in the economy.
Your credit score is an important indicator of your financial health, particularly in the eyes of lenders and creditors, so it’s important to always take steps to protect it. It's important to consider the future while the world is in a holding pattern. Eventually, you may find yourself in the market for a personal loan or mortgage that aligns with your financial goals.
Here’s a list of things you can do now to help yourself emerge from this situation, whenever it ends, in the best shape possible.
Make On-Time Payments
The best thing you can do for yourself is continuing to make on-time payments for as long as you can do so. The longer you can go without getting behind on monthly payments, the better. Even if you know you’ll likely need relief down the line, waiting as long as possible to take advantage of whatever options may be available to you will help make your situation easier because you’ll have fewer payments to catch up on once things return to some version of normal.
If you haven’t done so recently, it’s a good idea to take some time and evaluate your budget. That way, you can decide what you can cut and what needs to be kept. Account for your current living situation because what you may have previously considered “essential” may no longer seem as important, since practicing social distancing. Conversely, other things (like office furniture!) may take on added importance.
At some point, if you don’t have money coming in, you're likely going to need to turn to assistance. There’s nothing wrong with that, and we’ll be touching on things you can do in a second, but continuing to be current on your accounts for as long as you can will benefit you no matter what.
Check Your Credit Report
You should check your credit report regularly, but especially during this situation. It’s bad enough to have to worry about day-to-day financial planning. You don’t want something else to unknowingly show up on your report and negatively impact you.
Checking your credit report helps you see how things like bill payments and balance amounts are impacting your credit score. You’re allowed to get one free credit report per year from Experian™, Equifax® and TransUnion® from AnnualCreditReport.com. As part of the credit bureaus’ response to COVID-19, they’re now offering free credit reports once a week through April 2021. But for more actionable steps to improve your credit score, you’ll want to look to a service.
Also, our friends at Rocket HQSM will share your VantageScore® 3.0 credit score and report from TransUnion once a week.1 More than that though, you’ll get personalized tips on how you can better your score based on the information shown in your report.
When And How To Dispute Incorrect Credit Information
If you do find incorrect information on your credit report, the time to deal with it is now, whether it’s something as big as having an account or loan that you didn’t apply for show up or something as seemingly insignificant as a typo in your name or address. You don’t want any confusion whatsoever about your record.
All of the credit bureaus have a process by which you can file disputes online. This is the quickest and easiest way to handle the situation. However, if necessary, there are processes by which you can get started by mail or over the phone. The easiest way to find the procedures is to Google the particular bureau’s (Experian, Equifax, TransUnion, etc.) dispute resolution policy.
If you have incorrect information on one report, there’s a good chance there could be wrong information on the others, so if you find incorrect information on one, check all three of the major bureaus’ reports.
Protect Your Identity
Unfortunately, when there’s a disaster or other stressor affecting a large group of people, unscrupulous individuals will try to take advantage of the situation for their own personal gain. It’s important to protect your identity every day, but the priority heightens in a crisis.
If it sounds too good to be true, it probably is. Your bank or any other service provider will never email you asking for your username and password. If it really is your bank, they’ll already have ways of accessing your account if they need to.
Be extremely careful clicking on links in an email. If you get an email that you’re not sure about, go directly to the website yourself in your browser. Also, make sure to check in with the older folks in your life. Scammers prey on the vulnerability and lack of internet savvy exhibited by some of our elders.
If your identity gets stolen, it’s important to take steps to protect yourself and mitigate the damage immediately. Someone using your information can open accounts and take out loans in your name which can cause financial issues that may take months or years to fix.
Check out this post for more tips on how to protect yourself from scams related to COVID-19.
Contact Your Creditors And Lenders For Help
While you should try to make payments for as long as you can, if you find you need assistance, your creditors and lenders may have options to help. You just have to raise your hand.
If you need mortgage assistance due to COVID-19, the CARES Act gives you a legal right to pause your mortgage payment for up to 12 months. This is referred to as forbearance. You likely won’t want to opt for the full year right away because you do eventually have to pay it back, but it’s there if you need it. After the forbearance, your servicer will help you decide the best option for moving forward. Here’s more info on available mortgage assistance.
If you contact your credit card company or another lender, they may be able to provide relief in the form of forbearance, deferral (picking up your regular payment at a later date), balance forgiveness or a lower interest rate.
If you’re a Rocket Loans® personal loan client having trouble with your payment, you should know that we care about your financial health and we’re here to help! Give us a call at (800) 333-7625 to apply for loan assistance.
If a lender or creditor gives you a deferral, forbearance or other form of relief due to the impact of COVID-19, they are required by law to continue to report whatever the loan status was prior to the current crisis. If you were current, you’ll be reported as current. If you were 30 days behind, that’s what your credit report will say for the duration of the relief.
Consider A Balance Transfer
One thing you can take a look at to give yourself some relief is a balance transfer to pay off credit cards that may have a high balance. In exchange for moving your balance over, a credit card company will give you a certain period of time with low or no interest on the portion of the balance being transferred. This gives you time to pay off the balance with minimal interest being accrued, if any.
The downside to this is that there’s typically a balance transfer fee of anywhere between 2% to 5% of the transferred balance. Additionally, if you don’t get the full balance paid off by the time the promotional period ends, you’ll be paying it off at a much higher credit card interest rate.
These tips should help you protect your credit during this wild time. For insights on your personal situation, feel free to speak with a financial advisor.
1 Quicken Loans® (also doing business as Rocket HQ) and Rocket Loans® are separate operating subsidiaries of Rock Holdings Inc. Each company is a separate legal entity operated and managed through its own management and governance structure as required by its state of incorporation, and applicable legal and regulatory requirements.
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