It’s always a good idea to stay on top of your credit. Now in these uncertain financial times that have come as a result of the coronavirus pandemic, it may be even more important to keep track of your credit – especially if you know you’re going to need to make a major purchase, like a car, in the near future.
Why Keeping Track of Your Credit Is Important
It’s important to keep track of your credit not only during a unique time such as the COVID-19 epidemic, but all of the time. This is because it’s a major factor in financing many of the things you need, such as a vehicle, a house, and a major appliance, as well as qualifying for a credit card.
Lenders look at your credit to see how you’ve handled your financial responsibilities in the past. This helps them judge how you might handle the loan or line of credit you’re applying for.
Staying on top of your credit means checking your credit reports and keeping an eye on your credit score. Lenders use both when considering you for financing, and you need to know what they’re looking at.
Getting Your Credit Reports and Credit Score
Getting your credit reports isn’t difficult, and it doesn’t have to cost you. In fact, you can request them from the comfort of your own home, so you can practice the needed social distancing to do your part to stop the spread of the coronavirus.
You’re entitled to a free copy of your credit reports from each of the three national credit bureaus – TransUnion, Experian, and Equifax – once every 12 months, and you can get them by visiting www.annualcreditreport.com. If you want to check your credit reports frequently, however, it might be better to sign up with a credit monitoring service so that you have around-the-clock access to monitor your credit.
Your credit score can typically be obtained at the same time as your credit reports through a number of services. It can also be viewed for free through select online sites and often through your bank, credit union, or credit card company. If you don't have free access to your credit score, you may have to pay a small fee to get it. Try to get your FICO credit score, as this is the most popular model and the one that's most widely used by creditors.
4 Tips for Keeping Up With Your Credit
The COVID-19 epidemic has changed a lot about our daily lives. In today’s trying financial landscape, it’s more important than ever to have a plan for keeping on top of your credit. Here are four tips to help you during the coming weeks and months:
- Check your credit reports and scores – Checking your credit reports yourself, called a soft credit inquiry, doesn’t impact your credit score. Once you have copies of your credit reports, go over them and make sure there aren’t any mistakes or accounts listed that you don’t recognize. If you’re keeping track of your credit score, you may notice when something impacts it, noted by a significant rise or drop in your score. This can signal that it’s a good time to check your credit reports.
- Pay bills on time – One of the biggest factors that impacts your credit score is your payment history, so it’s important to keep up with your bills. Paying bills on time is one of the best ways to see your credit score increase.
- Talk to your lender if needed – If you’re having trouble keeping up with your bills, reach out to your lender(s) and/or service providers. Many companies are offering unique solutions during this difficult time, and you may be able to avoid a hit to your credit. Let your lender know if you’re being impacted by the current pandemic before you miss a payment, and they may be able to offer a solution.
- Budget and plan – Perhaps one of the most effective ways to keep your credit from being negatively impacted is to plan ahead. Create a budget to see where spending is needed, and where you can cut back. If you’re budgeting for something big, like an upcoming car loan, make sure you take into consideration what you need to account for – like a down payment; tax, title and licenses fees; and the monthly cost of the loan payment, insurance, and fuel. We have tips that can help you budget for an auto loan here.
An Auto Loan Can Help Build Credit
If you want to improve your credit and you need a vehicle, you can kill two birds with one stone, since an auto loan is a great way to improve your credit. Due to the coronavirus situation, you may even be able to get a deal on a car right now which might not have been available under different circumstances.
If you’re worried that your credit is already too low for you to qualify for an auto loan, think again. There are lenders that work with people in tough credit situations, and we know where to go when you need one!
At Auto Credit Express, we’re teamed up with a nationwide network of special finance dealerships that are signed up with this type of lender. We can help you get started on the path toward your next vehicle, and all you have to do is fill out our fast, free, and no-obligation car loan request form from the comfort of your own home.