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Credit Protection Help During COVID-19

December 17, 2020

Woman protecting her credit

There are several ways your credit score could become damaged during COVID-19. In recent months, many individuals have had to file for unemployment and take on additional debt. They may have even missed payments, or become a victim of identity theft or an unemployment scam. This is why focusing on credit protection is especially important right now.

If your credit score is negatively impacted during the pandemic, it can take a long time to recover, which may make it more challenging to get financing in the future with low interest rates. So, for credit help during COVID-19, use this guide, which offers actionable tips to help you protect your credit score during the pandemic.

6 credit protection tips

1. Regularly check your credit score

It’s important to check your credit reports regularly to ensure they’re all accurate. By staying on top of your credit score, you can check for possible errors or signs of identity fraud sooner rather than later. This means you can react quickly to problems and act before your credit is damaged.

Ideally, you should check your credit at the three main credit bureaus — Experian, Equifax, and TransUnion — to make sure you’re getting an accurate figure across all bureaus. With a credit report, you will be able to see how your payment history, level of debt, credit, and credit history affect your score. For instance, this guide from Experian walks you through the basics of how to check your Experian credit score.

2. Stay on top of payments to protect credit score dips

During COVID-19, many people are struggling to keep up with payments due to job loss or a reduction in salary. However, if you can at least make your minimum payments by the due date each month, this will prevent damage to your credit score. This, of course, is easier said than done. If you’re struggling, try to see if you can make other cutbacks in your budget to keep up with repayments.

Missing payments is common during times of crisis. However, instead of letting payment deadlines pass, it’s worth contacting lenders or service providers to warn them or to ask for help.

3. Contact lenders for credit help

If you know you’ll have trouble paying your monthly bills, aim to contact your lenders as soon as possible. Before you start missing payments, which can leave a mark on your credit score, ask your lenders about any hardship options they may offer. Many banks and other lenders are putting flexible policies in place to help those struggling during the pandemic.

You may be able to get a temporary lower interest rate or monthly payment or even pause your payments for a while. In some cases, you can even ask lenders to put your loans in forbearance. In this case, a lender will not report late payments to the credit bureaus, which can help to protect your credit score for a period of time.

4. Contact service providers for credit help

On a similar note, it’s worth contacting any service providers you have, too. Get in touch with the providers of your utilities, cable, or cell phone plan to see if they’re offering any help or flexible payment options during the pandemic.

Some service providers are trying to help customers stay on top of payments, so it’s worth spending a few minutes to see where you can alleviate some of the pressure with your bills.

5. Be vigilant about protecting your identity

Sadly, identity theft crimes and scams rise in times of crisis. During COVID-19, it’s important to remain extra vigilant when it comes to protecting your identity and avoiding possible scams. According to a recent survey from Experian, 55% of those surveyed have heard about COVID-19-related scams, which shows that fraudsters are taking advantage of the crisis.

If thieves manage to steal important information about you, they could use it to fraudulently take out loans in your name, or even government unemployment aid, which could be very damaging to your credit score. Sometimes, identity theft can go unnoticed for months, but by then, the damage is done to your credit score. If you remain vigilant about protecting your credit, you will stand a better chance of avoiding or quickly resolving identity theft problems.

You may want to consider an identity protection service or placing a freeze on your credit file if you suspect identity theft is taking place. You will need to contact ExperianEquifax, and TransUnion separately to freeze your files at each bureau, as this information is not automatically shared between them. This stops lenders from accessing your credit report, so any scammer will be turned down for credit. This freeze can be lifted by you and it gives you a bit of reassurance in the meantime.

6. Make budgeting a priority

In times of financial hardship, creating a budget is crucial to keeping your debt low and your credit score as high as possible. A sudden loss of income or a reduction in income means you will need to rethink your budget as soon as possible. Try to get a clear idea of how much money is coming in and going out, and make cutbacks where possible.

It may mean temporarily cutting subscriptions, such as gym memberships, cable, or video streaming. Cutting non-essential purchases, such as takeout, online shopping, and clothes, can also reduce your overall spending.

This can be difficult to work through, but the sooner you can create a strict budget for yourself, the better chance you have of meeting your financial obligations throughout the pandemic.

One way to start managing your budget is to get a budgeting app such as MintYNAB, or PocketGuard. Many of these are free and easy to use. This could help you stay in control, and monitor where you’re spending the most, so you can identify areas to cut back on.

The bottom line

These are the main ways you can focus on credit protection during COVID-19. Remember to remain vigilant and keep an eye on your credit score for any unusual activity or discrepancies. The sooner you come across any problems, the sooner you can start fixing them without further damaging your credit score.

Some of these steps will be harder than others, like keeping up with repayments during a job loss. However, if you can contact lenders and service providers and explain the situation, many are quite flexible right now and are even offering credit help. Lenders know that many of their customers are going through financial hardship and are taking steps to make things easier.