Coronavirus Credit Score Survey & Tips to Protect Your Score
The coronavirus pandemic may be disastrous for Americans’ credit for years to come. The unprecedented level of unemployment has left many people struggling to pay essential bills and charging more to their credit cards, which is concerning because total U.S. credit card debt already stood at over $1 trillion at the beginning of the year. As people’s credit utilization rises and they miss payments, it’s unsurprising that 87 million Americans are worried about their credit scores due to the coronavirus, according to a recent nationally representative WalletHub survey.
Below are more highlights from the survey, along with tips to protect your score during this crisis.
- Many Americans fear credit score damage: 87 million Americans are worried about their credit scores due to the coronavirus. Some of the most worried groups include middle-income people, the 30-44 age bracket and people with fair credit.
- Americans want missed payment forgiveness: 86% of Americans agree that credit scores should ignore any missed payments during the coronavirus pandemic.
- Housing payments take precedence: 58 million Americans are most worried about paying their mortgage or rent during the coronavirus pandemic, followed by 46 million most worried about paying their credit card bill.
- Women anticipate more debt: Women are 21% more likely than men to expect to get into more debt during the coronavirus pandemic.
- Financial priorities vary by age: Millennials' top financial priority right now is paying bills, while Gen Xers' is preserving cash.
How to Protect Your Credit Score During the Coronavirus Pandemic
Ask Your Creditors What They Can Do To Help. Credit card companies and other lenders are helping customers affected by COVID-19 on a case-by-case basis. You could be eligible for a reduced interest rate, deferred payments and other adjustments that could keep your account in good standing, preventing missed payments from showing up on your credit report and hurting your credit score. When granted a deferred payment, confirm with your lender that you will not be reported as “past due” to the credit bureaus.
To see what kinds of coronavirus relief your credit card company might be offering, check out our report on the largest issuers’ policies.
- Get in Touch with Service Providers. If you are unable to pay bills for utilities or services such as cable and internet, start a dialogue with those companies to prevent them from sending your account to collections, which would hurt your credit score. Most billers are willing to work with customers affected by the coronavirus.
Pay at Least the Minimum Required to Get Credit. If you do not make at least the minimum payment required by your credit card company by the due date, you will not get credit for paying on time. In other words, paying less than the minimum will not keep your account in good standing.
On the other hand, you do not have to pay a credit card’s full statement balance to prevent credit score damage – just the minimum. Paying less than the full balance owed will lead to interest charges (normally, at least), which isn’t ideal. But interest doesn’t have to follow you around for years, like a couple of missed payments would. So, make the payments needed to keep your credit report clean, and don’t stress too much about a bit of interest during these uncertain times.
- Check Your Credit Score and Credit Report Regularly. The more you check your credit report and score, the more familiar with it you will become, and the quicker you will spot any errors or signs of fraud that could jeopardize your credit score. You can check your latest credit score and credit report for free on WalletHub.
- Sign Up for Free Credit Monitoring. No one can watch their credit report 24/7 without some help, and there are plenty of reputable free credit monitoring services to choose from, including WalletHub.
- Be Careful About Adding New Debt. Borrowing to keep other bills at bay might be the best option for some people. But at a time when debt levels are already so high and many people’s income has disappeared, adding debt also means adding risk for the future. What you do not want to do is turn modest payment problems that could be solved other ways into a debt hole that you cannot climb out of. That is why you should make a plan for how you will use and then repay the money before even applying for a new loan or line of credit.
- Make Sure You Exhaust All Government Assistance. Don’t assume you are ineligible for financial support from the government or simply wait around for a check to arrive in the mail. Millions of people who’ve had no prior experience with government assistance are now suddenly eligible for several different types of stimulus funding and other forms of relief such as eviction protection. So, do your research into what federal, state and local programs might enable you to make ends meet, pay unavoidable bills on time, and avoid damaging your credit score. Being able to use stimulus money for everyday necessities will also help your savings stretch as far as possible during these uncertain times.
For more advice that will help keep your wallet safe during the pandemic, check out our Coronavirus Money Tips & Resources page.
Ask the Experts
As Americans stress about making their payments and avoiding credit score damage, they look for professional guidance on how to handle their finances. To provide more insight to worried Americans, WalletHub turned to a panel of experts. Click on the experts below to see their bios and responses to the following key questions:
- Roughly 87 million Americans (35% of adults) are worried about their credit scores due to the coronavirus, according to WalletHub's nationally representative survey - is that an indication that a major economic activity such as home/car buying will take longer than expected to bounce back?
- Should credit scores ignore any payments missed during the coronavirus pandemic?
- WalletHub’s survey found that women are 21% more likely than men to expect to get into more debt during the coronavirus pandemic - why do you think that is?
This report reflects the results of a nationally representative online survey of over 300 respondents.
After we collected all responses, we normalized the data by age, gender and income so the sample would reflect U.S. demographics.
Full Details Overall
|Are you worried about your credit score during coronavirus?|
|What bill do you think you’ll have difficulty paying during coronavirus?|
|Mortgage / Rent||23%|
|How long do you expect your finances to be hurt during coronavirus?|
|Not at all||27%|
|Should credit scores ignore any missed payments during the coronavirus pandemic?|
|How do you expect your credit score to change in the next 3 months?|
|Stay the same||54%|
|If your credit score falls during the coronavirus pandemic, who will you blame?|
|Which is your top priority financially right now?|
|Pay bills on time||51%|
|Find a job||10%|
|Prevent credit score damage||3%|
|Are you checking your credit score more often during the pandemic?|
|Do you expect to get into more debt during the pandemic?|
Note: Percentages may not total 100% due to rounding.
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