Protecting your credit score now could save you money later and help preserve your housing choices.
Faced with a sudden loss of income, many people turn to credit cards to tide them over without realizing that credit card debts can have hidden costs down the line.
The federal Consumer Financial Protection Bureau (CFPB) recently issued general advice on how to protect your credit score during the current health crisis when you might find yourself charging more on your credit cards due to lost income.
Credit scores are important for many reasons: They can affect whether you get to rent the home you want, they are a factor when lenders review your application for a home or auto loan, and they can determine the interest rates you pay on loans and credit cards as well as the premiums you pay for auto and home insurance.
If you’re unfamiliar with credit scores and the roles they play, this resource from the CFPB is a good place to learn more.
If you’re a homeowner with a mortgage, the federal coronavirus relief bill passed in March 2020 might protect your credit and provide some financial relief. According to the law, known as the CARES Act, if the company that services your mortgage agrees to suspend or reduce your monthly payment — and you make any reduced payment on time — they cannot report you to credit bureaus for late or missed payments through July 25, 2020, or 120 days after the President declares the emergency period concerning COVID-19 is over, whichever is later. Learn more about mortgage assistance for homeowners.
To help track and improve your credit score over time, you might explore any number of free apps that can help you stay on top of your credit.