News about COVID-19 seems to change every hour and people are doing everything in their power to make health and safety their #1 priority. Along with the obvious health risks, countless people are also being affected financially due to the impact this pandemic has had on our economy. As we all prepare ourselves for what's to come, we encourage all of you to be proactive when dealing with your credit during these trying times.
We've put together this list of actions you can take to ensure that you stay financially healthy while we fight COVID-19.
1. Be super vigilant about security and protecting your identity.
Especially during times like these, scammers, thieves, and criminals alike capitalize on innocent, vulnerable people. If you suspect identity theft or fraud in any way, you can place a security freeze on your credit reports. This prevents people from accessing your information and applying for credit using your name. (Ask us what our clients have been using to protect their identity)
2. Frequently check you credit reports.
During these stressful times, anything can happen. Checking your credit reports can help you catch any inaccuracies or fraudulent activity that might be reporting. We recommend you checking all three major credit bureau reports (Experian, Equifax and TransUnion) and reaching out to them if you see anything that needs to be corrected.
3. Dispute any items that are inaccurate.
Whether it's a fraudulent item sowing up, or a simple typo, disputing directly to the credit bureaus will help clean up your credit reports. Put those credit bureaus to work, it's why they exist in the first place!
4. Make a budget, plan for the worst, and expect the best.
Stay positive and be proactive about your budgeting. We've already established that anything can happen during this time. Budgeting in general is already a sound strategy, but now even more so. If after looking at your budget you feel that you might need to tighten things up, do it. Make sure you can cover expenses and still have some emergency funds left over.
5. Pay your bills on time.
We get it, times are tough. A lot of us can't go back to work and are quarantined at home. The best thing you can do is to at least pay the required minimums set by your banks and other creditors. There are some other things you can do to avoid late payments such as balance transfers for credit cards and home equity loans/lines of credit which you can use to pay off some debt. Keep in mind, however, some of the benefits of either can be temporary and might impact you in other ways. Contact us if you have any questions on either option!
6. Reach out to your lenders and creditors.
Ideally before you miss a payment, contact your lenders and creditors about some options they might have during times of hardships. Many of them are now putting policies into place that may allow for lowering of interest rates, pausing of payments for a period of time, and deferment or forbearance. They may also reach out to the credit bureaus on your behalf and issue a statement indicating that you have been affected by a natural disaster, protecting you even further. (Note: If you contact your creditors, you may be able to delay your upcoming payments. But you need to get in touch because payment waivers are not automatic.)
7. Reach out to your service providers.
If you feel that you might not be able to pay your utilities, cable, phone, or other monthly bills, contact your service providers to see if they offer flexible options during this time.
8. Seek professional help.
Consider working with one of our Credit Counseling Specialists if you feel that you need help managing existing debt. We can help you create a Debt Management Plan and a Budget to better handle your debt and expenses.
With the fluctuating market and growing concerns about investments and 401-Ks, it would make sense before making any impulsive decisions to also reach out to your financial counselors and investment professionals who can help guide you in the right direction.
For small business owners, CLICK HERE to read about the U.S. Small Business Administration Disaster Assistance Loans that are helping small business owners during this time of crisis.
Stay safe, healthy, and happy.