Did Your Credit Take a Hit in 2020? Here’s How to Bounce Back

Did your credit take a hit in 2020 because of the coronavirus? Millions of Americans have filed for unemployment and many are finding it tough to stay on top of their monthly payments. Sadly, missing your payments can have a serious effect on your credit. This can cause problems down the line when you’re ready to buy a home. If bad credit has you losing sleep at night, then read on about how to bounce back.

Get a copy of your credit report

Don’t just worry about whether or not your credit has been affected. Get a free copy of your credit report and find out. Your report will detail what is impacting your score. While we agree it’s no fun to see what the problems are, it’s only by acknowledging them that you can strategize how to fix them. 

Avoid new lines of credit

Don’t make the problem worse by obtaining more credit to fill the holes. This is only a temporary fix that can hurt you in the long run. Your credit utilization ratio is one of the factors that determine your credit score. This is how much credit you are using in relation to how much revolving credit you have available. The lower your credit utilization ratio, the better. The only exception is if you want to apply for a debt consolidation loan. This type of loan will help you consolidate, pay off, and close your existing debt.

Make on-time payments

Another major factor that determines your credit score is your payment history. One late payment can stay on your record for up to seven years. If possible, make all your payments on time. If you have trouble remembering to make your payments, then set up automatic payments. Try to reduce your spending by eliminating some expenses like dining out or large car payments.

Don’t close accounts

Once you’ve paid off an account, don’t close it. Your credit history is also a big factor when it comes to determining your score. However, you must keep those accounts active. Make small purchases on credit cards occasionally and pay off the bill in full every month.

Contact your lenders

Because of the global pandemic, many lenders are offering various relief plans. You should contact your lender to find out what’s available. They may have deferment plans that allow you to miss payments without being reported to the credit agencies. You can also ask your lenders for lower interest rates. Many are willing to work with consumers during these trying times. Although you aren’t guaranteed a lower rate, it definitely doesn’t hurt to ask.

Turn to the experts

Finally, having an expert on your side can help you navigate the process of credit repair. Whether you’re trying to plan for a future home purchase or simply want to get back on track, contact the experts at Agent inc. or Agent Credit Repair at 949-791-8160 or [email protected]. Our representatives are standing by to answer all your questions. Let us help you open your world to new possibilities!