With job numbers hitting record low levels, it’s clear the coronavirus economic crisis is far from over. And for many people, it’s taking a toll on credit scores. We are stretching your dollar with how you can protect your financial picture.
If the coronavirus has you carrying a higher credit card balance and spending down your rainy-day fund, you want to be careful! According to money.com, credit card issuers are becoming less tolerant. Compare Cards found a quarter of customers have had their credit limits decreased or had their cards closed in some cases without warning.
This is a problem because if your credit limit is reduced and your spending stays the same, your utilization ratio will go up which may negatively impact your credit score. It’s why it’s more important than ever you police yourself.
Here’s what you can do. Be sure you’re borrowing less than 30% of your available credit. If you do find yourself borrowing more, make an attempt to pay down the debt in proportion to the line decrease. That protects your score and the interest you’ll pay.
And of course, the basics: pay on time and at least the minimum to fly under the radar. Remember, if you can’t afford to pay a bill because of the coronavirus, you can call your card issuer and ask for forbearance. You can also try to negotiate a lower interest rate.
But money.com recommends making a point of specifically asking whether the special considerations will impact your credit score.