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How to Protect Your Credit During Difficult Times

​​Your credit score is an important part of your financial health. Having a strong score can help you do things like rent an apartment, apply for loans and even land certain jobs.

​But what happens if your financial situation changes due to the coronavirus pandemic or another emergency? How can you protect your credit score, especially when you're first starting to build your credit?

The good news is you can take steps to keep your credit in shape, even in an unexpected crisis. The following tips can help you maintain a healthy credit score during uncertain times.

Keep up with payments

Did you know that payment history is the biggest factor affecting your credit score? Late payments can stay on your credit reports for up to seven years! To keep your credit score in good standing and avoid late fees, try to make at least the minimum payments on your bills each month.

If you're unable to make payments on time, talk to your lenders and explain your situation. Many lenders may offer hardship or forbearance plans that could allow you to delay payments or suspend fees temporarily. These plans can give you some breathing room as you get back on your feet. Once your income returns, continue making timely payments to help rebuild your credit score.

Steer clear of scams

Unfortunately, scammers are taking advantage of the pandemic to steal people's identities and apply for credit cards or loans. The longer identity theft goes unnoticed, the more it can damage your credit. Take steps to protect your identity by securing your personal information, especially online.

Look out for the latest COVID-19-related scams, including calls or emails claiming to be from the IRS. Remember, the IRS and other government agencies will never call asking for your Social Security Number or banking information.

Check your credit reports

It's always a good idea to keep an eye on your credit reports, and right now, it's easier than ever to check them online. Due to the pandemic, everyone is eligible to receive free weekly online credit reports until April 2021 from the three nationwide credit agencies: Transunion, Equifax and Experian. You can get your free reports at AnnualCreditReport.com

Make sure all the information in your reports is accurate and up to date. Any unfamiliar accounts or charges could be a sign of identity theft. If you spot errors on your reports, contact each of the credit agencies to correct your information.

Revisit your student loan repayment strategy

Federal student loans were recently placed on automatic forbearance. President Trump signed a presidential memorandum on August 8, 2020 to continue the student loan relief enacted under the CARES Act extending the forbearance to 12/31/2020This allows borrowers to delay payments through December 31, 2020. During this period, interest on federal student loans won't accrue, so borrowers don't have to worry about their loan balance growing.

This won't negatively impact your credit score like a missed or late payment would. However, it's important to make a plan for when payments are due again. If your income has dropped, take some time to review the different payment options now to see what will fit in your budget when the forbearance ends. 

If your income is stable, it's smart to keep making payments on your federal student loans. Taking advantage of the temporary zero-interest period will help you pay down your total loan balance even faster!

At Wright-Patt Credit Union, we're here to help make life a little easier during this challenging time by offering temporary emergency services to members. We'll also continue to provide financial education and planning resources to help you stay on top of your credit health and keep your finances on track.