Protecting your credit during the COVOD-19 pandemic

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GREENVILLE, N.C. (WNCT) As the COVID-19 pandemic financially impacts the nation, many people are looking to talk advantage of reduced or skip payment programs to help make ends meet.

The Better Business Bureau serving Eastern North Carolina is sharing important information on protecting your credit during this pandemic.

They say the bottom line is to not panic, do your research, and communicate with lenders and creditors.

“Take time. It’s really important. This is such a crazy time for a lot of people and we want to make sure they are making smart financial decisions and oftentimes you’re not going to do that off the top of your head right then and there,” said Alyssa Parker, Director of Communications, Better Business Bureau serving Eastern North Carolina

Here are steps from the BBB you can take to protect yourself during and after the COVID-19 Pandemic:

1. Check your credit report early and often

You can now check your credit report every week for free. The three big credit reporting agencies, Equifax, Experian, and TransUnion, have long offered a free annual credit report. Now the three companies are offering free weekly credit reports for the next year to help people protect their score through any financial hardship caused by the coronavirus over the coming months. If you are working with lenders on payment accommodations, it’s important that you’re aware of all your creditors and have a clear “before” snapshot of your credit picture. Check to be sure that things are being reported accurately as you work with your lenders. An added benefit of starting with the credit report? All the contact numbers for all your lenders are on the report

2. Know your protections

Under the CARES Act, your credit card company or loan servicer has special requirements for reporting your payment record during the crisis. If you enter into an agreement for assistance with a creditor — for reduced or deferred payments, for example — and are current on your account, you will be reported as current even if you are not making regular payments, as long as you adhere to your agreement.

3. Know what impacts your score (and what doesn’t)

Being unemployed does not impact your credit score. But missing payments or making late ones will. That’s why it is important that consumers contact their lender proactively. Ask them if they have a hardship program. Find out how it will be reported to the credit reporting agencies. Late payments are generally not reported to credit reporting agencies right away. It usually takes a whole billing cycle.

4. Don’t use your credit card too much

Your credit may be a critical safety net right now, but keep an eye on how much credit you are using. Running up your cards can lower your score. Generally, using more than 30% of your available credit will reduce your score. If your limit is $10,000, for example, you need to use less than $3,000 — across all your credit cards, not just one. For many people, that may not be the biggest concern right now. If you’re relying on credit for basic necessities, making late payments will have a bigger impact than how much you use your cards. But know that when you can pay those very high balances down, your use of credit will go down and your score will rise again.

5. Take advantage of ways to boost your score

Some credit rating agencies have programs to help you boost your score by giving you credit for other bills not typically included on a credit report like your utilities or mobile phone. Experian Boost, for example, is a free program you can opt into that allows you to get credit for making those payments. While anyone can opt-in and benefit from their on-time payments, people with a limited credit history will see the most improvement.

Another thing you want to look out for during this time is scams. The FBI Charlotte Division is investigating several in our state like stimulus check scams and work from home claims.

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