Maintaining favorable credit can be difficult in the best of times. You work hard to build up your scores, control your spending, and prioritize the things that really matter. But sometimes, you may feel as if you are at the mercy of factors outside of your control.
In the wake of the COVID-19 pandemic and ongoing economic crisis, those feelings of helplessness could be more relevant than ever. Even if you have done everything right, you may now worry about your ability to maintain your creditworthiness and get the financing you may need.
Whether you are struggling to keep your business afloat or just trying to run your own household, your credit will play a big role in your financial future. Even if you do not need a loan now, you never know what will happen down the road. Therefore, taking steps to protect your credit now is an essential part of proper planning. Here are some immediate steps to take if your credit takes a hit during the pandemic.
Contact Your Creditors
Hiding out from your creditors is not a viable strategy in the days of COVID-19 (or at any other time). If your credit has taken a hit during the pandemic, the banks and credit card companies you work with likely already know about it.
Instead of closing your eyes and hoping the situation will go away, be proactive, and contact your creditors directly. Be honest about the source of your problem, whether it is the loss of business due to lockdowns or a drop in income as a result of the pandemic. This honest approach is usually the best one.
Depending on the creditor’s unique policies, they may offer a variety of financial assistance programs to help you reduce, defer, or possibly even forgive a portion of your debt until you get back on your feet.
Seek Help in the Form of Low-Interest Loans and Government Relief Options
If you’re having trouble making ends meet due to a job loss, large medical bills, or other unforeseen pandemic-related matter, a personal loan or business loan could be an option.
With the economic impact of COVID-19 still unfolding, both private lenders, as well as government-backed relief options, such as those outlined in the CARES Act may be able to help.
To find out which personal or business loan options could be right for you, talk to your financial advisor.
Monitor Your Credit Reports for Potential Fraud
COVID-19 has shifted much of our personal and business matters into a new online normal. Because of this, the threat of identity theft and the risk of a possible data breach are more worrisome than ever. If your credit takes a hit during the pandemic, fraudulent activity could be to blame.
One of the best things you can to protect your credit from possible fraud is to monitor your 3-bureau credit reports. Online credit-management tools, such as those found in ScoreShuttle, allow you to closely monitor your credit reports with all 3 credit bureaus. If you suspect fraud, ScoreShuttle gives you the power to dispute it in a single click. To access and review your 3-bureau credit reports now, click below.
Revisit Your Business and Household Budgets
Chances are you did not develop your budget with a pandemic in mind. Instead, you likely looked at your overall cash flow as well as your normal levels of spending.
That may be fine in normal times. But with a global health crisis raging and no definite end in sight, it may be time to revisit your business and personal budgets.
That may mean cutting down on several spending categories. For example, limiting takeout meals, holding off on a new wardrobe, or reducing the amount you allocate to other areas. No matter which approach you choose, trimming your budget now could improve your financial situation later.
The world is likely to be struggling with the impact of COVID-19 for some time. With this in mind, it’s important to take steps to prepare your financials for any possible outcome. If your credit takes a hit during the pandemic, you need to act fast, starting with the strategies outlined above.
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