- As per the RBI moratorium, American Express, Banks and other credit card issuers are offering relief for customers who have been financially affected by the coronavirus.
- You need to contact your lender/bank if you need to defer your payments.
- Paying your debts should remain a top priority, avoid these only when you think you can’t afford them.
- It’s important to know your options and government-issued relief measures.
The Covid-19 pandemic has turned our lives upside down. We are not allowed to go out of our houses, travel remains suspended, offices remain shut and as a result, the world is facing a huge economic crisis.
Millions have been furloughed or laid off and even more than that are on the verge of getting unemployed. Many are facing pay cuts and some are even told to go on for leave.
The situation is very critical where millions are struggling to earn their livelihoods but the condition becomes even worse for those who have ongoing loans and credit card bills to pay. When people are struggling to meet their daily requirements how can they afford to pay loans and bills?
Well as a measure to control the situation and continue the liquidity of funds among the masses, the government has announced a 3 months moratorium on EMIs. This has surely provided relief to the loan borrowers, but apart from this, people are also worried about their Credit card bill payment and their credit score. You don’t need to worry as this blog will help you to protect your CIBIL score during coronavirus pandemic.
Steps to manage and protect your credit during the COVID-19 (coronavirus) pandemic.
Get a copy of your credit report
It’s always suggested to check your CIBlL once or twice in a year. If you haven’t requested your free annual credit reports yet, you can get copies at AnnualCreditReport.com.
Equifax, TransUnion, and Experian each allow you to get your report for free once in a year. The currently going situation is unusual and you can even request additional reports for a small fee if you’ve already received your free report.
Check for mistakes and read your report carefully, in case you rectify an error then write a letter to them and your lender as well.
If you can’t make payments, contact your lenders
Many lenders have announced proactive measures to help borrowers impacted by COVID-19. As per the moratorium given by RBI, banks are free to pass on the benefits to its customers who cannot afford to pay their EMI’s if they are affected by the COVID pandemic. Hence, if you are not in a condition to pay your EMIs, inform your lender about it. Doing this will not only minimize your financial trouble but will also help you to maintain your credit score.
Know your protections
With natural disasters and emergencies, many lenders are willing to provide forbearance, loan extensions, a reduction in interest rates, and/or other flexibilities for repayment. So, to avail these facilities, the first thing you need to do is contact your lenders and explain your situation to them, tell them how the pandemic has affected you. The lenders will consider your point and will pass on these benefits for your ongoing loan. This will not be reported to the credit unions as default or late payments and this will not affect your CIBIL.
Don’t use your credit card too much
As we are already facing a health as well as an economic crisis, our credit may be a critical safety escape for us in such a situation.
Hence, you need to control your credit card expenses to save it for critical situations. Doing this will also help you to maintain your credit score.
In case you are bound to use your credit cards then keep an eye on how much credit you are using. Running up your cards can lower your score.
Generally, using more than 30% of your available credit can reduce your credit score, so keep this in mind every time you swipe your credit card.