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How to Keep Your Credit Score in Check Amid the Pandemic

Due to the coronavirus outbreak, many people around the world are stuck inside their homes to prevent the spread of the virus. However, their spending power has been paralyzed too with many having to postpone their business operations, while others needed to take a break from work.

A major question that pops amidst these times is, “How will this affect my credit score?” In this article, we’ll help you understand how the pandemic can impact your credit score and how you can keep it in check.

How can the pandemic affect your credit score?

The pandemic can impact your credit score in three major ways:

1. Discontinuing payments

Because generating income is difficult during these times, most people have to stop settling debts, which is understandable. Since you have less money coming in, you really won’t have much choice. Even so, not paying outstanding debts will put a dent in your payment history, and your credit score could drop because of this.

2. Obtaining more credit

Credit cards can be a solution to your legal tender problems during these times, which is why you might attempt to obtain more credit. Consequently, applying for credit items will increase your credit inquiries, especially if you’re maxed out on the existing limit. Additionally, your credit score will drop as your records will suggest that you’re relying too heavily on credit.

3. Excessive credit use

As cash is hard to come by, it can be tempting to use your credit cards. While it’s alright to do so, using credit excessively can send a signal to creditors that you’re relying on credit way too much. Ultimately, you’ll also increase your credit utilization ration, and you’ll accumulate high-interest charges, which can eventually lead to your credit score dropping.

How to keep your credit score in check?

1. Contact your creditors

During these trying times when a lot of people are having trouble generating income, you can contact your creditors and explain that you can’t keep up with current payments. The chances are high that they will allow you to defer payments since this is not an issue exclusive to you. You can do this by sending a letter that explains how the current crisis has affected your liquidity.

If it’s not possible to defer your payments, try to settle the minimum amount for your payments to stay on track.

2. Use your emergency fund

You might have an emergency fund, but you’re thinking to yourself that it’s not yet time to use it. Well, we hate to break it to you, but if you’re having trouble staying financially flexible, you might have to use your emergency fund. After all, this is a health crisis, and the future version of you will probably understand.

3. Use up other savings

If you’ve been saving for a new appliance or a new smartphone, you can use that money for now to navigate these times. Instead of relying on credit cards and lowering your credit score, it’s way better to put those items off for now. It’s going to be worth it when you see you survived the pandemic without incurring more debt.


Keeping your credit score in check will be extremely difficult during times like this. However, you need to try everything in your power to ensure that you don’t go over budget and keep your financial health in a great position.

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