Keeping an impeccable credit score during the current health crisis might seem trivial in the grand scheme of things. A record-setting 6,648,000 unemployment claims were filed before the week ending on March 28th according to the Department of Labor, and with most Americans under lockdown, which translates into people not shopping, traveling, dining out, flying, staying at hotels, etc, many more will lose their jobs, making the current situation only the beginning
There is no doubt that mitigating the spread of the virus is the number one priority and for those who have been laid off from their jobs or are working reduced hours, putting food on the table comes first. But this situation will pass and in order for you to recover financially as best as possible, keeping your credit score in check is important.
While we understand that paying for the staples of everyday life, and regular bills may become difficult, the unfortunate reality is that missing payments can negatively affect your credit score and make it difficult to achieve approval for loans in the future.
This is why it is important to review your financial situation and adjust accordingly.
Some countries have put in place a special “emergency payment freeze” which ensures an individual’s credit score is protected during the current health crisis. In the UK for example, Experian, Equifax and TransUnion have announced that customers who pause mortgage and loan repayments due to the coronavirus epidemic won’t damage their credit scores.
The US has not established an emergency payment freeze or blanket holiday freeze, however, because people's credit scores can still be affected during COVID-19, and banks and creditors are still reporting things like missed payments to the credit bureaus, it’s important that you take charge of your finances. If you know that you will not be able to make at least regular minimum payments, speak to each lender and credit provider and discuss your options to negotiate special arrangements.