Monitor your credit report and be proactive.
Check your credit report with all three credit bureaus (Experian, TransUnion, and Equifax). You can get a free copy of your credit report from each bureau once every 12 months at AnnualCreditReport.com. However, during the pandemic, the three credit reporting bureaus have made weekly reports available for free. To read more about getting weekly credit report updates, click here.
By checking your report, you’ll be able to identify potentially fraudulent activity and respond to it before it damages your credit.
Be extra vigilant about protecting your identity, as well. Identity theft and related scams spike during times of crisis, so it’s vital to keep your personal information secure. If you suspect identity theft, you can place a security freeze on your credit file for free. This prevents lenders from accessing your credit and stops would-be identity thieves from applying for credit in your name. You can lift the freeze any time, also for free.
To check your credit, file an online dispute, or temporarily freeze your credit, just click the link for the credit reporting bureau you want to contact.
Experian | TransUnion | Equifax
Remember, if you want to dispute something on your credit report, you have to contact all three agencies.
Make a budget and plan ahead
If you think current conditions will affect your income or finances, tighten your budget to make sure you have the money you need to cover your expenses. Establishing a budget and sticking to it is always a good idea. But it’s essential when forces outside of your control cause you to take a hit. To create your budget, make a list of your bills, including the amount due and the day of the month you usually make your payment. Then start to set money aside for each bill in advance so you have enough when the bill comes due.
Pay your bills on time.
Make your payments on time. Do it even if you only pay your creditors’ minimum requirements. It may be difficult, but try your best. Paying your bills on time will help avoid damaging your credit history and score. Maintaining a good credit score will allow you to get credit later if you need it to recover from the pandemic.
Contact your lenders and credit card providers
If you know you can’t to pay all of your bills, contact your lenders and ask about hardship options. Do it before you miss a payment. The COVID-19 pandemic has caused many lenders to implement policies to help customers struggling to pay bills.
For example, some lenders will lower your interest rate or payment amount. Others will pause your payments temporarily by offering deferments and forbearance agreements. You don’t have to make loan payments while your loan is in deferment or forbearance. And your lender will not report your account delinquent to the credit reporting bureaus.
If your account is in good standing and hasn’t had any previous delinquencies, contact your lender to request a temporary accommodation.
Contact your utility providers.
If you can’t pay your utility bills, including your cell phone, cable, or other monthly bills, contact your service provider. Many are offering offer flexible payment options.
Seek expert assistance.
If you feel you need help managing your existing debt, consider working with a certified credit counselor. Nonprofit counselors can help you create a debt management plan to repay your debts in a manageable way. The New Jersey Department of Banking and Insurance maintains a list of certified financial counselors here: NJDOBI Counselors.
If you have investments, savings or retirement accounts, U.S. market fluctuations can have a significant impact on their value. Before you make changes to your investments, consult the financial experts where you invest or bank. Talk to your company’s 401(k) representative, as well.
Do not use your retirement savings to pay bills. Retirement savings are protected in bankruptcy. And, if bankruptcy becomes an option, nothing is gained by cashing in your retirement savings.
Finally, news reports indicate a wave of new bankruptcy filings in response to the financial hardship caused by the COVID-19 pandemic. If you’re thinking about bankruptcy, Ernest G. Ianetti, Esq., is available for FREE consultations. Although our office is open, we can accommodate clients with phone and video consultations during the pandemic.
