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The disruption caused by the coronavirus pandemic has spiraled into job losses, closure of enterprises and other consequences which might all impact consumers’ ability to meet their financial obligations. When the time comes to clear your bills, you might have a larger balance and a reduced financial capacity to do so. This, in turn, affects your credit standing.
A credit score is essential for good management of your personal finances. It guarantees easier access to loan facilities, lower premiums on services such as auto insurance and utility bills. In the economic flux caused by COVID-19, it’s advisable to keep learning alternative ways to shore up your credit standing.
In this post, find out some ways to minimize any negative impact on your credit standing. Read on.
Monitoring your credit report during the pandemic is the only way to assess the state of your personal finances and create a plan to repair any damage. You can detect any suspicious activity on your bank accounts or inaccurate information which need immediate attention.
The three nationwide credit reporting agencies (TransUnion, Experian, and Equifax) give free report once in a year. Try to space these free reports across the year to stay up in the know about your repayments.
On-time payments prevent a negative hit on your credit rating. This ensures you save on any late repayment charges and you also avoid higher premiums. In case of financial constraints, contact your creditors before the loan’s due dates. They can identify an alternative plan to ease your financial pressure.
Introductory card offers are cheaper and you can transfer your debt from your existing high-interest card. You enjoy lower rates that ease the pressure on your income. This also and helps keep up a strong credit score.
There are different ways to prioritize you loan repayments based on your prevailing debt situation. Take a look:
Start by reviewing your finances, make adjustments to your spending, list all your expenses, create a budget and build a plan to repay your credit card bills.
If you realize your debt burden is worsening, it’s time to pause and seek financial help. Your financial advisor can suggest debt relief strategies. Only use a repayment plan that improves your credit score.
The coronavirus crisis continues debilitating personal finances but with a proactive strategy, it’s possible to stay on top of your credit standing. These tips are springboard to help you maintain your credit score in the volatile economic situation.
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