Simple steps to protect your credit
Maintaining a strong credit score and a healthy credit history can make it easier to rent or buy a home, get a new credit card, obtain an auto or other loan, and even enjoy better insurance rates. If you’ve recently lost your job or are struggling financially, your first priority should be to make sure all your basic needs are met. Prioritize necessities like your mortgage or car payments. But if you still have a paycheck coming in and resources to pay your bills, keeping tabs on your credit score can help secure your finances for the future.
Understanding your credit score: Your credit score, or FICO score, is a three digit number that’s based on the information in your credit report, like how often you pay your bills on time, the amount of credit and loans you have, and how long you’ve had credit. Potential lenders use this number to determine whether to approve you for loans or credit, and what interest rate to charge you. Commerce Bank credit card holders can view their FICO score for free on their monthly credit card statement.
Continue to follow good financial habits.
To maintain a healthy credit score and credit history, make sure you’re practicing good financial habits like the ones below:
- Pay your bills on time. To avoid missed payments, consider enrolling in autopay for recurring monthly bills.
- Don’t apply for more credit than you need, and avoid opening several new accounts in a short period of time.
- Try to keep credit balances to no more than 30% of your credit limit. Your credit limit can be found on your monthly credit card statement.
Check your credit report. Monitoring your credit report on a regular basis is the best way to ensure that information about your credit history is accurate. Since lenders and creditors may only report your information to one of the three credit bureaus, it’s a good idea to request and examine reports from all three: Equifax, Experian and Transunion. You can access your free credit reports here as often as once a week through April 2021.
When you look at your credit reports, make sure to review and confirm your personal information, including names, addresses, Social Security number, accounts and loans. Then check that other information is accurate, like payment history and account status, including how long accounts have been open. If you find information that is incorrect, contact the business that issued the account or the credit reporting company that issued the report. You may also dispute inaccurate information for free.
Protect yourself against identity theft
In addition to checking your report for errors, you should also make it harder for inaccurate information to get on there in the first place. The COVID-19 pandemic has led to an increase in online scams and attempts at identity theft. Take steps to safeguard your personal information with these tips:
- Carefully examine monthly statements — like those for your credit cards, utilities and bank accounts — to ensure charges are correct
- Shred statements and other documents you no longer need that contain your personal information
- Avoid accessing financial accounts on a public Wi-Fi or making online purchases on an unsecured website
- Carry as few credit cards as possible so if you lose them, not all are at risk
- Password protect your computer and other devices
Contact your lenders and creditors right away if you’re having trouble paying bills. If you’re experiencing financial hardship, it’s a good idea to contact your creditors as soon as possible, ideally before a payment is due. This is especially important for high-priority bills like rent payments, mortgages, car loans and utilities, because not paying these would have severe consequences for you and your family. Even one missed payment could potentially impact your credit score. Explain your current situation and ask about available options or programs, such as forbearance, deferment or a reduced interest rate. The Coronavirus Aid, Relief, and Economic Security (CARES) Act has forbearance and credit reporting requirements that may apply to your situation. You may also qualify for federal resources or credit counseling and debt management.
If you are a Commerce Bank customer facing financial difficulties due to the impact of the coronavirus, please call us at 833-518-3458 to discuss how we can help you. You can also visit our help page here.
Protecting your credit and maintaining a strong credit history are important steps to getting the best borrowing terms in the long term, but during emergencies it’s most important to cover your basic necessities first. If you’re struggling and feeling financial stress, you are not alone. Your Commerce banker can help you prioritize and make a plan to stay on track. Contact us if you’d like more information.
- How much you know about credit scores? Take our interactive credit quiz
- How to boost your credit score for lower interest rates
- Protecting yourself from coronavirus scams