33% of cardholders did something that could hurt their credit score during COVID-19
Survey: 33% of cardholders did something that could hurt their credit score during COVID-19
A recent survey from Bankrate showed how devastating the pandemic has been for Americans who have had to choose between paying bills and keeping food on the table.
A look at the Bankrate survey findings
According to survey findings, one-third of U.S. credit cardholders have made at least one credit misstep since the beginning of the coronavirus outbreak in March of 2020. For example:
- 17 percent of U.S. adults racked up additional debt
- 12 percent paid a bill late
- 8 percent carried a balance on their credit card with the goal of improving their credit score
- 6 percent did not pay a bill at all
- 3 percent canceled a credit card with the goal of improving their credit score
How to keep your credit score in good standing during a pandemic
While there are financial factors beyond your control during the pandemic, do have some control over your credit score, and working to preserve and improve your credit score is one of the most proactive things you can do in the current U.S. climate. Here are all the steps you should be taking now:
Pay all your bills early or on time, even if you can only make minimum payments
Since your payment history makes up 35 percent of your FICO credit score, even one late bill payment can cause your score to take an enormous hit. It’s crucial to make sure you pay every bill you have on or before your due date.
Pay down debt
The second most important factor that makes up your FICO score is your credit utilization. Keeping your credit card utilization below 30 percent of your available credit will boost your score. If you have the means to pay down debt, you should try.
Keep old credit card accounts open
The length of your credit history makes up another 15 percent of your FICO score, so make sure you don’t close old accounts thinking this will help you. If anything, you should keep all accounts you have in good standing open as long as possible.
Save money while you can
Open a high-yield savings account and see if you can transfer any amount to this separate account on each payday, even if you can only afford to save $20 or $50. Any amount of emergency savings can help you keep up with bills and preserve your credit if your income drops or disappears.
Reach out to your issuer
Also remember that you’re not alone in this struggle. Most prominent credit card issuers and lenders are still operating coronavirus relief programs, which can help you skip payments for a few months, qualify for a lower interest rate, or receive some other type of assistance.