How to Minimize the Impact of COVID-19 on Your Credit Score

As the COVID-19 crisis continues to unfold, millions of Americans are worried about losing their sources of income. Loss of wages can lead to missed payments on your mortgage, student loans, credit cards, and other bills. When you miss these payments, it can negatively impact your credit score, which will later affect your chances of applying for future loans, renting an apartment, or even applying for a job.

Having a strong credit history is crucial in protecting yourself financially during the pandemic and rebuilding after it’s finally over. It’s critical to ensure that your credit score is intact and do whatever it takes to keep it that way. Here’s how to reduce the coronavirus impact on your credit score.


Mortgage relief options

If you’re unable to make timely mortgage payments, then it’s best to contact your lender immediately. On March 27, the Coronavirus Aid Relief and Economic Security Act (CARES) was made law. As a borrower with a federally backed mortgage loan, you’ll be granted forbearance of up to 180 days if you’re undergoing hardships due to the coronavirus.

If your mortgage isn’t backed by the government, it’s also best to call your creditor and request for assistance. In the Consumer Financial Protection Bureau site, there’s a guide on options you can access during the coronavirus.


Credit card payments

If your account is currently in perfect standing, no past missed payments or defaults, you’re protected under the CARES Act. The Act will offer temporary credit score protection if you’re unable to make monthly payments. Discuss with your creditor for a payment accommodation, and once a written agreement is in place, they won’t report negatively to the credit bureaus.

Alternatively, some credit companies are also allowing financial relief to their customers during the coronavirus crisis. They can either allow you to skip a payment or offer a lower annual percentage rate. Discuss with your lenders to find out what your best options are.


Student loans

The CARES Act also offers relief if you have student loans. The Federal Student Aid has taken steps to place student borrowers in forbearance through to September 30, meaning you can stop making monthly payments if you’re unable to.


Auto loan payments

If you miss or default on your loan payments, the first thing to do is call your creditor right away. When you default in your loan repayments, it stays on your credit report for seven years, which will adversely impact your credit score as the years go by. At this time, your goal is to keep your credit score as high as possible, so contact your lender to avoid this.

The best strategy is to call before you miss a payment. Most creditors have put in place payment deferral options for their customers. Find out their terms and conditions as they may vary with each lender.

Also, you’re protected under the CARES Act, and your lender can’t report negatively if you have payment accommodation in place.

In the wake of the coronavirus pandemic, you should monitor your credit score to make sure they are documented accurately. You can request your reports at

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.