Today, most Americans have been out of work for over a month. Yet, the monthly bills are still coming in. Yes, there are temporary laws in place preventing creditors from reporting a borrower late for 90-days. 

However, the question lingering on many of our minds is: how do I protect my credit scores during these uncertain COVID-19 days?

It is common practice for lenders to investigate your credit history and obtain your credit score from one of the bureaus before ruling on your application. They need to determine the level of risk they are incurring by lending you money. It’s about figuring out the odds of them getting their money back. Your credit score is central to that decision. And considering where the economy is going, credit criteria will be tighter. 

Here are the top tips you need to know to make sure your credit score doesn’t let you down the next time you apply for financing.

1- The Longer is, the Better

You look more reliable as a financial risk if you have a credit history. Strange as it may sound, you need a credit history to get credit. So, how do you get a credit history if no one wants to give you credit? It’s a good question, although luckily, there is an answer.

Start creating a credit history as soon as possible as an adult. In the past, people thought the best way to do it was to get a credit card. 

As many of them have learned the hard way, there are pitfalls to that approach. Instead, get an instant credit builder loan from the lender SELF.INC. This is the type of loan you take not to buy something, but rather to get your credit history up and running. The repayments on this microloan are easy to make as many of them are interest-free. 

2- When it comes to Debt: Less is More

The credit utilization factor weighs heavily when it comes to your credit score, with the average being about 30% of the total. It is calculated by examining your used credit as a ratio to your available credit. For an excellent score, the ratio shouldn’t exceed 7%.

3- Pay on Time or Else

You must make your payments on time and in full every month. If you don’t, your credit score immediately suffers since this factor accounts for 35% of your final score.

When you listen to the credit woes of the people around you, more than half of them will tell you about their bad credit that was caused by late or missed payments. If you run into financial trouble, speak to the lender immediately and make arrangements to protect your credit score.

4- Keep it Lowest

Lower balances on accounts and credit cards make you look like a viable candidate for credit. When it comes to using these facilities, try to pay the full balance every month. You’ll avoid interest charges as well as give your credit score a boost.

Know what you owe and keep records of everything. Sometimes there can be an error on your credit score, and you can sort it out if you have proof of payment.

5- Inquiry Free. Stay under the radar

There are times when a credit score check is inevitable, such as when you seek finance for a mortgage or another significant sum of money. But a flurry of checks can set off alarm bells for lenders.

If you’re making multiple applications, the lenders become aware of it. Either you’re debt shopping, or you’re about to go on a spending spree. Regardless, it doesn’t look good and can reduce your credit score.

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