Managing your credit through financial hardship
Due to this pandemic, millions of consumers and businesses are facing very tough times regarding finances but it is very important that people stay in control of their credit in this stressful time.
Below mentioned are ways to manage your credit through financial hardship in this covid-19 pandemic and beyond:
- Protection of your credit score:
As income flows in the coming months is going to decrease, people may find themselves urging to use their credit cards more, or even take money out of their home loans. The intelligent thing to do is to first of all pay your bills on time. Paying the bills on time affects your credit score drastically.
In these tough times, it is even more important than usual to protect the credit score because easy access to credit can often save you from these rough patches.
- Communicate to your lenders:
If the cash flow short and you are worried you are about to miss a payment then the best thing to do is contact your lender before the payment is due. You can easily explain your situation and ask whether the lender can offer you some help in terms of time frame.
You can also contact your bank all the company that issue will credit card whether you have been affected by the covid-19 pandemic financially. They may even qualify you for some financial freedom.
You can also ask your lender whether he is reported any late or missed payments to the credit reporting agencies. This depends on the lender whether he reports the late payment immediately or wait for a small time. You can also find out how your lender reports your accounts to the credit reporting agencies.
You need to ask these types of questions while having a conversation with your lender:
- Do they provide any for hardship/forbearance program?
- What is the calculation of interest while I am in hardship/forbearance?
- What long does hardship/forbearance takes time come in effect?
- What are the requirements to apply for hardship or forbearance?
- Controlling your credit health:
It is important that you check your credit report to make sure that all your account information are correct. You can be provided one free credit report each year from several information providers. This way, while contacting your lenders to discuss your financial situation, they have access to your correct data.
“We know many people are feeling anxious about their finances during this challenging time. Organizing your credit information and maintaining communication with your lenders are two ways you can help stay in control of your credit health during times of uncertainty” says Reddy.
You can also manages and stay in control of your credit health by:
- Updating yourself on your credit report. The credit reports tell a lot about your financial story to anyone who is reviewing it. It is very important that the information provided by the credit report should be accurate.
- The use of free tools to help you keep track of any changes on your credit information does giving your peace of mind. Many providers offer many kinds of free credit protection products.
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