How to protect your credit during the coronavirus pandemic

By Jackie Lam

Tapping into your credit cards to cover your essentials isn’t ideal. But you might need to reach for the plastic if you’ve been laid off, furloughed, or your income from a side hustle has taken a hit due to the current economic climate. 

Truth bomb: According to a recent survey, 1 in 4 Americans are adding to their credit card debt load in the wake of the coronavirus. And, if you’re in a financial pinch and need to miss a bill payment, be aware that this might cause your credit score to drop. 

Even during difficult times, it’s important to protect your credit. Keeping a solid credit score will help you land the best interest rates and terms on a car loan, mortgage, and credit cards. 

Here’s how to protect your credit during the coronavirus pandemic.

  1. Know what forms of economic relief already exist
  2. Lower your bills
  3. Reach out to your lenders
  4. Keep tabs on your credit
  5. Watch out for scams
  6. Bottom line

Know what forms of economic relief already exist

Before you take any action, it’s important to know what forms of economic relief are available at both the state and federal level. Here are some forms of relief that you might be able to take advantage of:

  • Government relief. Whether it’s a stimulus check, unemployment benefits, or a rent freeze, the government is helping out. So, make sure you research available government resources to find out what’s available. 
  • Student loans. Because of the CARES Act, federal student loan payments from March 13, 2020 to September 30, 2020 are suspended. Your payments will automatically stop. You won’t have to do a thing. 
  • A discount or refund on your insurance premium. Many car insurance companies are offering either a discount, refund, or credit to your premiums for a few months. You’ll most likely get notification of some sort. But if you’re curious, reach out to your carrier and talk to a customer service rep to get the full details. 
  • Utility bills. If you can’t cover your gas or power bill, some states have mandated that utility companies — think gas, water, and electricity — can’t disconnect your services if you aren’t able to pay. Many utility companies also can’t charge late fees. But be aware: after a grace period ends, you may still be on the hook for paying bills.

Learn how COVID-19 may affect your money and learn more about the available resources 👇

Lower your bills

Another way to protect your credit is to lower your expenses so that you can afford to pay your bills. So, go through your budget to see which bills you can lower or nix completely. Take a look at some expenses you can cut while still enjoying these services on a budget:

  • Entertainment. Instead of paying for a bunch of different streaming subscription services, your library card can give you access to digital downloads of movies and TV shows.  You may also be able to get a limited subscription to streaming entertainment. HBO, for example, is offering its “Stay Home Box Office” promotion, which features over 500 hours of free programming from some of its most popular, classic titles. Some other streaming platforms are offering longer trial periods. Amazon Prime Video, Acorn TV, Hulu, Netflix and Showtime have 30-day free trials. Just be sure to cancel before you hit the 30-day mark. 
  • Internet providers. Some Internet providers offer a basic plan if your income has taken a hit. You’ll have to meet the qualifications to become eligible.  In addition, if you have kids or students in your household, you might be able to get free Internet service for the school year. It can’t hurt to reach out to your local home Internet carrier and inquire. 
  • Cell phone bill. Some providers are issuing free upgrades to unlimited data and cell phone usage. If you can’t afford your current bill, you might be able to switch to a different, low-cost plan. 

Reach out to your lenders

In a perfect world, we pay bills on time. And while payment history makes up 35% of your credit score, when you miss or pay a bill late, this can do some serious damage to your credit score.

But if your financial situation makes it tough to cover bills, let alone make on-time payments, it’s time to reach out to your lenders. They might be willing to provide some form of economic relief.

Some credit card companies, for example, will lower your monthly minimum payment, drop late payment fees, or put a pause on payments for the time being.  

Keep tabs on your credit

You can keep track of your credit score in a couple of ways. First, you can order a credit report from AnnualCreditReport.com. Second, you can order one for free from each of the three major credit bureaus — TransUnion, Equifax and Experian. A handful of money management apps and credit card companies also offer a free credit score. 

Lastly, you can sign up for a free credit monitoring service, which not only helps you keep tabs on your credit score, but shows you areas where you can improve and boost your score

Watch out for scams

Sadly, would-be Internet thieves are keen to steal your credit card information and commit acts of fraud. So, don’t share credit card information — or any personal information, for that matter — via unsolicited texts, calls, or emails. What’s more, be wary of inputting your credit card information when using public WiFi. 

Bottom line

Just because your finances might be topsy-turvy doesn’t mean you can’t protect credit during these times. You can do your best to pay your bills, lower your expenses, and seek help when you need it.  

Remember: The power is in your hands. You’ve got this.

Jackie Lam is an L.A.-based financial writer whose clients include Fortune 500 companies and FinTech startups. Her work has appeared in Forbes, Business Insider, and GOOD.

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