As the COVID-19 pandemic continues to evolve, it’s becoming increasingly hard for people all over the world to stay on top of their finances. Of course your health and welfare should top the list of your priorities, but it follows that many people are also concerned about how current events are affecting their personal finances.
Your credit score is an integral part of your personal financial profile, and any issues could make it harder to access credit in the future. For that reason, it’s incredibly important to stay on top of your credit rating and keep working to improve your personal financial situation.
As the pandemic rages on, here are our top tips on how to protect your credit and strengthen your financial position.
1. Pay your bills on time, every time
While it may not always be easy, you should make every effort to pay your bills as they fall due. Even if you’re only settling the minimum requested amount, paying your bills on time should be an absolute priority since your payment history is one of the most significant factors affecting your credit rating.
2. Consolidate your debt
A handy tip if you do find yourself trying to pay multiple creditors at once is to consolidate your debt. By taking out a quick cash loan, you could pay off all of your existing debts and roll them together into one.
Dealing with debt in this way affords debtors a few benefits, not to mention the fact that you’ll only have to remember to pay one debtor rather than scrabbling to deal with multiple companies at different times throughout the month. For one thing, the overall rate of interest may be lower than some of your existing liabilities, and you may also be able to reduce your total debt figure and reorganise your outgoings so you can pay off what you owe much faster.
3. Be direct with your creditors
If you know that you can’t pay your bills on time or in full, speak with your creditors directly. The sooner you engage with them, the sooner they can work with you to put a plan in place and to stop you from getting overwhelmed.
As the pandemic rages on, many lenders are putting policies in place to give borrowers that little bit of extra help should they need it. If you’re unable to settle what you owe, your lender may be able to temporarily freeze your account, reduce your expected repayments, or enter into a repayment plan that consists of more affordable incremental payments spaced out over a longer period of time.
In some cases, you may even be able to prevent your credit score from being damaged by a late payment. In certain circumstances, lenders may be willing to refrain from reporting your late payment to the credit reference agencies, meaning that your score will not be harmed despite your late settlement.
4. Check your credit rating often
If you do find yourself in a difficult financial situation, checking your credit rating often could help you to fully understand your position and to act accordingly. Beyond that, you’ll be able to protect yourself against errors and fraud.
If you comb through your credit file often enough, you’ll become adept at picking out errors. These can be reported to the credit reference agencies and corrected to ensure that you’re being treated fairly and that your score accurately reflects your financial status.
5. Make a budget
Now more than ever it pays to have a budget. Almost all financial tips focus on carefully planning your personal finances, and there’s no better way to get a handle on your money than by making a comprehensive budget.
You should be sure to include all income and expenditure whilst being as realistic as possible. This will allow you to calculate what you’ve got to work with, and give you the information needed to enter into detailed conversations with your creditors should the need arise.
Beyond this, if you do find that current conditions are impacting on your ability to pay your debts as they fall due, a budget could help you to work out what’s going wrong. A few adjustments here and there could make all the difference to your ability to repay – putting you in a better position and protecting your credit rating in the process.
Staying safe and financially secure
All in all, the pandemic has presented significant financial challenges for all of us. Whether you’re struggling to repay debt or just want to stay on top of your credit rating, reviewing your finances and keeping tabs on your money has scarcely ever been more important.
Fortunately, with a few simple tips and a willingness to engage with your situation, you could avoid any nasty surprises and accelerate towards a brighter and more financially stable future.