Alright, we’re doing this! Waking up your credit score from the deep piles of your bills, frozen veggies, forgotten socks could feel cumbersome, but if anything’s going to change in light COVID, why not give your credit score an immune boost?
We are living in an unprecedented time. Millions of Americans have been affected by the coronavirus. Over 50 percent of the economy has completely shut down, causing people to social distance until further notice. The unemployment rate soared to an all-time high of over 14 percent in April 2020, which hasn’t seen these levels since The Great Depression. In response to this dramatic increase, the US government changed the application criteria to include freelancers and small business owners, plus they have increased the weekly allowance to account for COVID. Moreover, the negative effects of COVID are widespread. Businesses are closing and banks are apprehensive to allocate loans even if applications look perfect on paper. To say the least, things are super weird and yet many of us are left to cope are new financial realities and our credit scores have taken a huge hit! All those days you spent searching for answers on how to improve your score. Today, it all depends on one magic word and that’s the very thing that got all of our panties in a bunch: COVID.
The bright side of all of this economic depression is that we have time to breathe in quarantine and take advantage of the time to call creditors. Here are 3 ways you can improve your credit score during COVID.
Pull your reports on www.annualcreditreport.com. You’ll need basic information for this platform to render scores from all three credit bureaus. It takes less than five minutes to obtain and it’s easy to figure out what exactly is on your credit report with the simple pdf.
It is important to understand what your credit score consists of so you can know what to work on paying and getting removed from the report. To improve your credit means increasing your chances of getting a better mortgage, access to loans or simply financing an essential and like a refrigerator or air conditioner, get current on your payments and stay current. Remember that your credit score is based on 35% of how well you pay your bills on time, 30% of how much debt you owe and much smaller percentages are attributed to your credit history, what other mix of credit you may have ( like mortgages, student loans, etc), and finally recent credit accounts.
During COVID, use this time to figure out how you may be able to pay down debts or maybe if you find yourself with some extra budget, consider opening a new credit account to maintain a healthy credit score.
Did you know that adding a brief consumer statement to your account could help your credit score?
If you are experiencing loss due to COVID, you can add a brief statement explaining why your bills are late or why you recently may have closed some of your accounts. These statements are posted into your account and can dramatically reduce the number of digs your credit score can take during COVID. You can add a letter by logging into the credit bureau.
You can raise your credit score in less than 30 days by correcting errors in your report!
During COVID, it is essential to keep an open line of communications with your bill collectors. There are special guidelines and rules in place to help you get back on track with your bills, and a lot of companies are even waiving late fees! Use this as an opportunity to pay down some of your debt, get back to a “good payer” status, and make sure this effort is recorded on your credit report in a timely manner! All the hard work will pay off. Just be patient and persistent. Together we can all be in the 700+ credit score club! Comment below if you’ve made steps to increasing your credit during COVID and what results have you seen thus far?