If the ongoing pandemic has, unfortunately, had a significant impact on your finances, for instance, you’re coerced to use your credit limit to the full extent and damage your credit score, then you’re not alone. In fact, the number of people who are unemployed, according to the Pew Research Center, grew more quickly in only three months this year compared to during the Great Recession.
Because of this, a lot of people have reasonable concerns and worries about how the pandemic will affect credit history, credit card debt, and other factors of their finances. Of course, every situation is unique.
However, there’s one thing that could boost or improve your credit score if the crisis has had an effect on your credit. Read on to know more!
The Most Effective Way
The best way to improve your credit score quickly is to use credit cards. It can be the best way to establish your credit because there is a way you can use credit cards without repaying any interest, even though they bear high-interest rates.
It is a good idea to use websites like Credible to look for various credit cards, from balance transfer cards to secured cards, and give an in-depth comparison right away. Websites like Credible can aid you in any situation from building credit to redeeming rewards.
Keep in mind that every month, credit card issuers report the main balance on your credit card bill to the credit bureaus. And if you still have an outstanding balance, lenders will know that you are utilizing your available credit and learn how you handle your debts.
Make sure to repay your bill in full amount to keep away from any interest fees. Moreover, if you own a rewards card, you can use your cash back or points and miles to pay for some expenses.
The following are some of the other ways you can boost your credit score:
- Timely Payments: Keep in mind that your payment history is the most crucial aspect of your credit score. With that said, repaying your bills on time is very important, even if you only pay a portion of it every month. If possible, it is wise to pay your credit card bill to keep away from late payment fees and high-interest rates. What’s more, if you fail to make a payment in one month, you will, for the most part, have thirty days from the due date before it is reported to the credit bureaus.
- Maintain Low Balances: The rate of your credit limit you are utilizing at a given period, known as your credit utilization rate, is an essential aspect in computing your credit score. So, if you are always using more than your available credit limit, it could be an indication that you are having a difficult time handling your debts. Therefore, it is much better if your credit utilization ratio is lower. Otherwise, think of using a consolidation loan to repay your debt. As a result, your credit utilization rate will, without a doubt, drop to zero.
- Open Unused Accounts: Remember to never close your unused credit cards. These old credit cards of yours can help establish your credit score, regardless if you don’t use them. Well, it’s due to the length of your credit history, which is another important aspect of your credit score. But keep in mind that several issuers might close down your account if it is inactive for a long time. That said, consider using the card every now and then just to keep it active.
- Supervise Your Credit: If you want to know which areas are lacking or needs your immediate attention, look at your credit report. With your credit report, you can see your current credit score and track your developments.
Managing Your Personal Finances During Pandemic
For many people, using credit cards is possible to establish and keep a good credit score. Even so, credit repair is not the only approach you can do to boost your financial situation. You can get on a budget, save money for emergency situations, and be more wise and smart about debt.
At times like this become unpredictable, look for options wherein you can stash away some money for your future.
If you have a more stable and solid financial foundation, you probably have better chances of overcoming the effect of the pandemic. Also, be sure to practice smart and wise financial habits. Take this time to reflect on your financial decisions and to get a better sense of your situation. Keep in mind that maintaining a good score is vital to a flourishing and booming financial lifestyle. See to it that you prioritize paying your debts to avoid severe repercussions for you and your family.
I am Arjun Kumar. I am the owner and administrator of Finance Gradeup. I have completed my education in Arts & Technology. Arjun Kumar usually has interests in playing games, reading and writing. He was a brilliant student during his college days. He also works for many private companies, but the main interest of Arjun Kumar is digital marketing. He thinks that reading is a must before providing any quality information to his readers. You can find Arjun Kumar on much social media handles online, or you can learn more about him in about us page.