If you are one of the millions of people staying home due to the COVID-19 pandemic, or one of the brave workers keeping our country running, it may feel like this crisis will go on forever. But like all past health crises, this one will eventually come to an end. You can start preparing your finances today for the light at the end of the coronavirus tunnel.

Here are some steps you can take now to improve your credit score

. When life gets back to normal, you’ll be glad you took the time to upgrade your personal finances.

What you need to know about your credit score

Start Preparing For The Day After The Pandemic Ends: Improve Your Credit Score Now - What you need to know about your credit score

Start Preparing For The Day After The Pandemic Ends: Improve Your Credit Score Now - What you need to know about your credit score

Your credit score is an important measure of your history of managing credit accounts. Credit cards, student loans, personal loans, car loans, mortgage loans, and virtually all other debt is a factor in your credit score.

The most popular companies that measure your credit score use a scale from 300 to 850. A higher credit score helps you in many ways. Your credit score is a major factor in getting approved for a loan. It also helps you qualify for the best interest rates. This may not seem like a big deal today. In your financial future, however, it makes a big difference.

When applying for a mortgage loan, for example, a good credit score is essential in getting approved. Because interest rates are partially based on your credit score, an excellent score can save you tens of thousands of dollars over time.

Because it has such a big influence over your finances in the long-term, you should never ignore your credit.

How often should you check your credit score?

It used to be very expensive to check your credit, but these days you can check your credit score regularly without any cost. I like to look at my credit score at least once a month. That may be excessive for some people, but you should try to check in at least every few months.

According to government studies, about one in five people have errors on their credit reports, which is exactly why it’s a good idea to check for errors on a regular basis.

If you are planning on applying for a new loan within the next six months, consider checking your credit at least monthly to make sure everything is accurate and gives you the best chances for approval.

Where should you go to check your credit score?

If you want to know your credit score, you have more than a few resources at your disposal. Here are some of the best places to get credit-related information online:

AnnualCreditReport.com

The official government-mandated website to get your credit report is AnnualCreditReport.com. You can get your credit report from all three major credit bureaus, Experian, TransUnion, and Equifax, for free once per year at this website. You won’t get your score, but you will the underlying details.

Your bank

Your bank or credit card company may give you access to your credit score for free. They already have it as part of working with you, so it doesn’t cost them anything extra to give you access.

Credit Sesame

Credit Sesame is a free website you can use to view your credit score and credit report details. Checking your credit score on this website doesn’t impact your credit. The advertising-supported website shows you offers for relevant credit cards and other deals based on your credit, but there is no obligation to take advantage.

Free tools to improve and protect your credit score

Experian Boost

Do you wish your phone and utility bills showed up on your credit report just like a credit card or student loan? Experian has a relatively new product that allows you to do just that. Experian Boost connects eligible bills to your credit report. Make sure you pay on-time every month, as those on-time payments will help your credit score.

Experian Boost is free to use. Even if you don’t have credit cards or other loans, you can build a good credit score by showing good payment habits. Lenders want to see a history of on-time payments as a signal that you will pay loans as agreed. If you have bad credit or are new to credit, this program is a great way to improve your credit score without spending any money.

TrueIdentity from TransUnion

TrueIdentity is a credit monitoring and locking service from TransUnion. This product is free of charge and gives you added control over who has access to your credit information. Outside of times when you are applying for a new loan or need your credit checked for some other reason, you should consider locking your credit to avoid identity theft.

After major breaches at companies around the world, odds are your information has leaked. It really might be just a matter of time before someone tries to use it to open a fraudulent credit card under your name. 

Using TrueIdentity, you can turn a credit lock on and off easily on your own. This only works at TransUnion, not the other two credit bureaus. It’s free to use and comes with $25,000 of identity theft insurance just in case. It’s a great product anyone with credit accounts should consider.

What steps can you take during the pandemic to improve your score?

When you’re locked in with nothing to do but stream hours of online TV, it’s a great opportunity to focus on improving your credit.

Here are some steps you can take to improve your credit score now and enjoy the benefits when the pandemic ends.

Always pay on-time

One of the biggest factors in your credit score is your payment history. A perfect on-time payment history can take years to build and just moments to ruin. Late and missed payments stay on your credit history for seven years, so it takes the better part of a decade to fix past mistakes.

Make a point to always pay every credit-related bill by the due date. Make at least the minimum payment and your credit score will improve over time.

Pay off revolving credit balances

One of the other biggest factors in your credit score is your credit balances. While lenders expect installment loans to go down slowly over time, revolving accounts like credit cards have balances go up and down over time.

Your credit utilization ratio is the percent of available balances you’re currently using. If you have two credit cards with a $5,000 limit, your total available credit is $10,000. If one card has a $500 balance and the other has a $1,500 balance, you’re using a total of $2,000, or 20%, of your credit.

Experts often suggest keeping your credit utilization below 20% or 30%, but for an excellent credit score, the best utilization ratio is 0%. Pay your cards off in full every month to avoid interest charges and keep a high credit score.

Avoid new credit unless you need it

New credit can bring down your credit score in a couple of different ways. The impact is temporary, so you shouldn’t always avoid new credit. However, you shouldn’t apply for new credit cards or loans unless you really need them.

New credit applications typically lead to an inquiry where the lender reviews your credit score. An inquiry from a lender usually has a small negative effect on your credit. A new loan or credit card also has a temporary, negative impact.

If you manage a new account well, it should help your credit over time. But in the very short-term, it can drag your score down. If you plan on getting a new mortgage or car loan in the next six months, it’s a good idea to avoid any new credit applications.

How some creditors are offering relief and how to find out if your’s are

Start Preparing For The Day After The Pandemic Ends: Improve Your Credit Score Now - How some creditors are offering relief and how to find out if your’s are

Start Preparing For The Day After The Pandemic Ends: Improve Your Credit Score Now - How some creditors are offering relief and how to find out if your’s are

Over 26 million have lost their jobs in just five weeks since the coronavirus crisis landed in the U.S. A wide range of lenders recognize the challenges people around the country are grappling with and have offered relief programs to help customers from falling into further financial challenges. Here are some examples:

For credit cards, private student loans, and any other borrowing, contact your lender to learn about COVID-19 relief. There are many new programs rolling out daily, so just because you didn’t find anything helpful last week doesn’t mean you can’t get help today.

Summary

When locked in at home, it’s easy to forget about day-to-day needs like managing your bank account and credit cards. Forgetting to pay a card on-time can still hurt your credit. Managing your loans well, however, can put you on track for a credit score in the 800+ range.

Keep your finances in focus and use the extra time at home to level up your money game. When the pandemic ends, you’ll be glad you did.

If you’re looking for some more help with your money during Coronavirus, MU30 has a video you should check out!