How to Protect Your Credit During the Coronavirus Shutdown

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As the coronavirus pandemic continues to develop, you might be concerned about the long-term impact any changes to your finances could have on your credit. Relief checks and delayed payment timelines are helpful, but can they ultimately hurt your credit score or history?

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I talked to Rod Griffin, senior director of public education and advocacy for credit bureau Experian, about the factors to keep in mind as you navigate your finances in these confusing times.

Find out who to call if you need help

First things first: You need to know where you have accounts and what you owe.

If you haven’t pulled your free credit report in a while, getting one now can give you a baseline for your accounts and balances as you enter into what could be a difficult financial period.

The best place to get your free credit report is still annualcreditreport.com, which allows you to get one report from each of the three credit bureaus per year.

Griffin shared another benefit to pulling your report: It’ll typically show you contact information for all your credit accounts. “Make sure you have everything in front of you before you move forward,” Griffin said.

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Don’t worry about your score

If you arrange for deferment or forbearance on your credit accounts, Griffin said to make sure you understand the terms of the agreement, as each lender has their own policy. You’ll want to make sure you understand how long the arrangement lasts, whether it can be renewed, and whether interest will continue to accrue on your account.

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One thing you don’t need to worry about is whether your score will go down if you take any of the accommodations offered by your creditors.

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The CARES Act passed in March stipulates that your credit history cannot be negatively affected by any coronavirus assistance programs your creditor or lender provides, provided your account was current before you asked for help. That means you can defer payments, make partial payments or modify a loan without seeing your score drop.

In addition, any relief you receive, whether from a stimulus check or expanded unemployment benefits, won’t be reported to the the credit bureaus. “Take advantage of the help that’s available if you need it,” Griffin said.

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Use credit if you need to

There are some factors that could cause your credit score to drop, but if you need to use credit to get by right now, a decrease shouldn’t be a surprise.

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If you pause payments on your account but still have to use credit to pay bills and buy essentials, your credit utilization ratio is likely to increase—and that could push your score down a few points. Griffin emphasized the importance of making a plan to repay your debts and reduce your balances after the pandemic. “Your score will go back up. Don’t panic about that,” he said. “Don’t overuse credit, but if you do, make sure it’s for real needs.”

If you’re not planning to apply for new credit in the next few months, your score doesn’t really matter. Just focus on following the plan you made with your card issuer or lender, and keep an eye on your accounts.

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Beware of identity thieves

Just because credit card companies are being helpful right now doesn’t mean you can let your guard down.

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“People are getting strange phone calls, emails and even text messages” claiming to come their credit card issuer or bank, Griffin said. “If something doesn’t feel right, don’t open it.” If you get a message regarding a financial account, don’t click on any links or give out any account or personal information. Instead, look on your billing statement or the back of your card for a customer service number and call to ask about the message you received. If it’s legitimate, they’ll be able to tell you about the offer or accommodation.

You can also help protect your identity by going to trusted sources for information. Experian has a list of coronavirus customer service links for financial institutions, and TransUnion offers a directory of additional services you may be looking for at this time.

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If you’re applying for unemployment, make sure you’re accessing the legitimate unemployment application for your state by going through benefits.gov, which has a state directory.

Darknet  Lifehacker

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