During these challenging times, the health and safety of your families are your top-most priorities. With that said, there's another pressing issue that is posing enormous difficulties for people across economic segments. Individuals are worried about how current economic conditions might affect their personal finances. 

Here, in this guide, we offer you tips on how you can be proactive in monitoring your credit scores, helping you stay on top of your personal finances. 

Achieving a good credit score is not easy. What’s more difficult is maintaining it. Delayed credit card bills and missed EMI payments as a result of Covid-19 impact your credit score. During these challenging times, individuals are facing unexpected financial burdens and reduced incomes, all of which can lead to long-term effects on the credit score. 

Does availing the EMI moratorium impact credit scores? 

The government announced the Covid-19 relief package in the last week of March. This offers massive relief for several individuals. However, there has been plenty of misconception regarding the moratorium. One common question is, "Will my credit scores be impacted if I opt for the three-month EMI moratorium?"

Fortunately, No. Generally, when you miss an EMI or credit card bill, it shows up as a black mark on your credit report and impacts your credit score negatively. However, under the Covid-19 relief package, credit scores are not affected, even when you opt for the three-month moratorium. This comes as a massive relief for self-employed and salaried individuals, who are dealing with reduced incomes during this crisis.

Tips to Protect your Credit Score during the Corona Pandemic 

Here are some easy steps that you can take now to keep your credit scores on solid footing amidst the Covid-19 pandemic. 

  1. Try to pay your bills on time, if possible

While we know that it’s a financially challenging time, we highly recommend you to pay your bills on time, if possible. If that’s difficult, try to pay at least the minimum debt payments before the due date every month. This helps to protect your credit score. Do your best to pay bills on time, even if you’re only meeting the minimum balance requirements. 

  1. Seek help from Lenders 

If you know that paying your bills and EMIs on time is not possible, you can try contacting your lenders to explain your hardships. Ideally, you should approach your lender before you miss a payment. 

As the pandemic continues, several lenders are offering EMI moratoriums for customers to pause their payments temporarily. Alternatively, some lenders may even offer you extra time to pay your bills or lower your interest rates temporarily. 

  1. Reach out to Service Providers

If you are unable to pay your various utility bills like electricity, telephone, and internet bills on time, make sure to reach out to your service providers. See if they can offer some flexible options for your payments.

  1. Monitor your Credit Scores Regularly 

During these critical times, you need to be proactive about your credit scores. Check your credit reports regularly to see if it's accurate. This way, you can spot any fraudulent activities or mistakes and report it before it damages your credit ratings. Note that when you self-enquire your credit score, it is considered a soft inquiry and doesn’t impact your score. 

  1. Be Extra Vigilant to protect yourself from Online Frauds

Several reports indicate that online scams, identity thefts, and other fraudulent activities have increased during the Corona pandemic. Hence, you must protect your personal information online.

Be aware of spam emails and never click on any suspicious link. Do not share your credit card information and other sensitive banking information with anyone. Monitor your bank statements, credit, and debit card usage regularly and set up transaction alerts.

If you notice any suspicious activity or fear identity theft, report to the concerned authorities immediately. Additionally, ensure that your online accounts are protected by opting for secure passwords and two-step authentication systems.

  1. If needed, seek Financial Assistance

If you’re having a hard time making ends meet, you can consider working with a financial counsellor to guide you. Non-profit debt counsellors can help you work out a debt management plan to repay your debts while protecting your credit score.  

Also, the fluctuations in the market may cause significant concern for individuals with savings, retirement, and other investments. Before you make any panicked decision, make sure to consult an investment expert to help you with the right professional guidance and support.

  1. Create a Budget and Plan Ahead 

The current situation may impact income levels and finances. This is the time to consider tightening your budget. Ensure that you have adequate funds to cover your monthly expenses and meet any emergencies, as well. Make a budget and stick to it. 

  • Avoid taking new loans or acting as a guarantor for loans availed by friends and family, all of which can impact your credit scores and increase your financial risks.

  • Avoid unnecessary expenses. Make sure to reduce your expenditure, until the economy has recovered and things get back to normal. 

  • Plan for the long-term. Build an emergency fund, and try to prioritize expenses. 


Make your Credit Score Covid-19-proof using these Tips

The best way to protect your credit score during these challenging times is by paying all your bills and EMIs on time. If that’s not possible, ensure that you pay at least the minimum requirements of your lender, to avoid a fall in your credit scores. 

If you know that you won't be able to pay your bills on time, be proactive, and contact your lender as early as possible. You may be able to work out a feasible solution with your lender. This way, the lender will not report your late payment to the credit bureau, thereby protecting your credit score.