With high unemployment rates throughout the early half of COVID-19 in 2020, we know that many people in the Dallas area also saw their formerly good credit scores decline. When struggling to pay the bills, credit is often the only way to make ends meet—yet late payments (or missed payments) quickly begin to affect your credit score.
Should you try to fix your credit during COVID-19? You may be wondering if now is the time to even begin seeking credit help with more potential issues on the horizon. Credit Diva of Dallas always recommends fixing your credit sooner rather than later—even during a struggling economy. There are always things you can do to boost your score.
Check out these tips for credit repair that will see you through these days of hardship to a brighter future!
Monitor Your Credit Report
Even if you're afraid to look, the first step toward better credit is understanding your credit report. Job loss and other financial factors can be unkind to your credit score—but ignoring these figures won't support your steps for credit help.
- Through April 2021, all three credit bureaus (Experian, TransUnion, and Equifax) are offering free weekly credit reports.
- Take advantage of this by visiting annualcreditreport.com to request your reports.
- Review each report and make sure you understand how different financial transactions impact your credit score.
Your monthly rent or mortgage payment is probably higher than the minimum monthly payment for your credit card. However, paying for your housing should be a higher priority for your available cash flow during difficult financial times.
- Even with pauses on evictions and other help in place to protect consumers from a lack of housing during the pandemic, stopping payments on your rent or mortgage can have devastating effects on your credit score.
- Talk with your rental property owner or mortgage lender about options for your monthly payments.
If you must decide between a smaller minimum credit card payment versus putting money toward your rent, prioritize rental payments to protect your credit score.
- Talk with your creditors about outstanding balances and your financial situation.
- Arranging a short-term deferment or forbearance won't eliminate your debt.
- However, it can protect your credit score during these tough financial times.
Throughout the pandemic, many financial institutions have offered payment postponements to help people suffering from unemployment. Making these arrangements with your creditors is a much better option than stopping payments without permission.
Deferments or forbearance won't negatively impact your credit score. However, you will need to resume payments to erase your debts at the end of your payment pause.
After you've prioritized housing payments and made arrangements with creditors, you probably still have other bills to pay. Making additional payments will be challenging until you regain your income.
- Remember: you don't have to pay everything off at once to make progress toward a better credit score. Start by making small efforts toward paying bills on time.
- This demonstrates positive steps toward repaying debts to financial institutions and credit reporting agencies while positively impacting your credit repair efforts.
- Commit to making at least the minimum payments on a few bills or credit cards. Delivering these small payments on time is better than not paying anything at all.
Skipping payments is one of the most significant causes of bad credit. Staying consistent with small payments will keep you from defaulting on a credit card bill or loan and reduce the likelihood that you'll need more significant credit help.
Choose the Best Credit Repair in Dallas
Balancing limited income across all of your financial needs—while boosting your credit score during a pandemic—might sound impossible. If you find you need some support to rebuild good credit, Credit Diva of Dallas can help support you on this journey at any time—no matter the state of the economy.
When the economy and your income improve, don't get caught with bad credit! Let our team help you analyze your credit report and implement a plan to start boosting your credit now. Contact us to get started!