With the COVID-19 pandemic sweeping across the country, millions of Americans have found themselves out of a job. For some people, it was a temporary bump in the road, and for others, the financial loss is still ongoing. According to Pew Research, of those who have lost a job due to the coronavirus, half say they are still unemployed. With this type of widespread financial difficulty, many people have struggled to make timely payments on their debts. In trying to manage the financial difficulties, it’s easy to make mistakes along the way that could harm your credit. If you have done this and your score has taken a hit, there are ways to repair your credit.
You may be wondering if you should attempt to fix your credit or try to improve your score during the pandemic. The fact is a good credit score will enable you to get the best rates for your loans. That means you will save money if you have to borrow money now or in the future. Also, you never know when you’ll need access to resources. A damaged credit score cuts you off from accessing money and things you might need. So, it makes sense to repair the mistakes you’ve made during the pandemic.
Before you can deal with the mistakes on your credit report, you’ll need to review your report to see what types of issues are showing up. If you had a moratorium from your rent or mortgage, but it’s showing up, then that would be a mistake on their end, not yours. You’ll need a professional to help you get it resolved.
Once you review the report to ensure there are no errors, begin to pay down your loans. Start with small loans that are easy to manage.
Next, consider adjusting your credit utilization ratio. This percentage is calculated by dividing your total credit balance by your total limit available, then multiplying by 100 to arrive at the percentage. The ideal place you want to be is 30% or less. You can change this ratio by either decreasing the balance or the credit amount. Changing the credit limit would mean increasing the limit on a card or applying for a new card. Sometimes this isn’t always the best solution if you’re already struggling. The other way to change the ratio is to decrease the balance, but it will take time to make a change.
If you do decide to apply for additional credit, make sure to space it out from the one you had previously. If they’re too close together, it can cause your score to dip some.
Finally, having a variety of credit loans in your portfolio is a plus for your score. This means make sure your loan types are diversified. So, you have credit card loans, mortgage loans, personal loans, and so on. This mix will be helpful to your overall credit score.
You can be proactive about your credit score and take the first step in ensuring it is in good shape. Reach out to a credit repair firm, such as Credit Diva of Dallas, and begin the repair process. At Credit Diva, we manage all the details of making sure your credit score is the best it can be. We review it carefully for mistakes and aggressively dispute issues that shouldn’t be on your report. We’ll also keep an eye on your credit report to make sure there is no fraud or theft occurring. All you have to do is sit back and watch your credit increase. Get in touch with us for more information.