Protecting your credit is always important for good financial health. But for many people, the COVID-19 pandemic has made that more of a challenge than usual. More than 35 million people in the United States have filed for unemployment, while others may be facing reduced work hours or a drop in household income. That makes it difficult to stay on top of loan and credit card payments and avoid delinquency.
Then there is the very real phenomenon of becoming mentally overwhelmed while living through the pandemic, which can cause you to forget due dates and end up with late payments on your credit report.
However, it isn’t as difficult as you might think if you take a few simple measures. Here’s how to protect your credit score, even during a pandemic.
Check your credit report
While free credit reports are normally available only once a year, from now until April of 2021, all Americans have access to a free copy of their credit reports from each of the three credit bureaus, every single week. You can request your free reports at AnnualCreditReport.com.
Carefully review each report to ensure no fraudulent accounts have been opened in your name and that there are no mistakes. If you see new inquiries you didn’t make or your balances don’t look right, call the credit bureau and your card companies, as those could indicate fraudulent activity. You’re entitled to file a dispute for any errors or fraudulent accounts that appear on your credit report.
Keep tabs on your credit score
Most credit card companies provide your credit score as a benefit of your account. If you have this feature on your account, review your score monthly when it updates. A significant drop in your score may point to fraud, and the sooner you catch malicious behavior, the better.
Pay your monthly minimums (if you can)
Your instinct right now may be to keep as much cash on hand as possible, and that’s a sound move for the most part. But if you can make at least the monthly payments on your credit cards and loans, as well as the full monthly payment on your rent or mortgage, you should. Making your minimum payments or staying current on your rent, credit card, or loans may feel like a strain now, but it could prevent you from experiencing even more hardship in a few months.
Review your budget
If money is especially tight, review your budget for any nonessential expenses you can cut to keep paying your bills. Perhaps you’re being charged monthly for a subscription box or you could cut out a TV streaming service. Those expenses may not seem like a lot, but you’d be surprised how much it is cutting into your budget. One study found that 84% of people surveyed underestimated how much they spend on subscription services. A few simple cuts could add up to a monthly payment on one of your credit cards, helping you maintain good credit.
Set up autopay
Between the financial and health worries created by coronavirus, many people feel mentally overwhelmed. While that is understandable, it can also make you forgetful, even about important bill payments. Setting up automatic payments for your monthly minimums ensures you won’t miss those due dates, helping you avoid late fees, interest and a hit to your credit score. Autopay also gives you one less thing to remember in an already trying time.
Secure your accounts
Now is the perfect time to review the passwords to your personal accounts, including financial logins and credentials for any medical accounts or other sites that store sensitive data. If you’ve been using the same password for multiple sites, create unique ones for each account.
Where possible, enable two-factor or biometric authentication (logging into accounts with the same fingerprint you use to unlock your phone, for example). Being vigilant with your monthly credit score checks is still essential to spotting fraud or identity theft on your accounts. But good security practices can prevent you from getting hacked in the first place.