Why You Must Be Credit Healthy During The COVID-19 Crisis

From the start of January 2020, the Covid-19 impacted all aspects of life.  Bank of Stillwater, MN, and Hudson, WI, saw a steady demand rising for new credit nowadays. The layoffs, salary cuts, trade loss, and manufacturing crisis hurt every human life along with the economy badly. Whether you want a business loan Stillwater or a personal loan from banks, having a good credit score is of utmost importance. If you are among those facing the cash flow crunch and considering taking a mortgage in Hudson or Stillwater, it's time you look at your credit score first.

Importance of Having Healthy Credit Score

Your credit score shows the bank your creditworthiness in Stillwater and Hudson. When you pay back your loans, credit cards dues, or EMIs on time, it leaves a positive impact on your credit score. According to Equifax, if you maintain your credit score anywhere between 670 to 739, banks in the US will consider it healthy.

 

Having a healthy credit score automatically puts you in the category of acceptable or lower-risk borrowers in the eye of any bank in Stillwater and Hudson. It opens up the opportunity for you to get lower interest rates on unsecured loans. Being credit healthy allows you to negotiate better mortgage terms with banks in Stillwater and Hudson. It also helps you pick your desired tenure and amount of the loan.

Tips To Remain Credit Healthy During The Covid-19 Crisis

1) Check your credit score regularly

As your income fluctuates during covid 19, making a habit of checking your credit score regularly can help you avoid major discrepancies if any.

2) Pay credit card debt without delay

Place a reminder on your phone to mark the due date for credit card payments. Pay it before any late payment fee arises. Do not let credit balance pile. It only allows the interest to accrue on balance, impacting your credit score negatively.

3) Avoid withdrawing cash using a credit card

If you use a credit card for withdrawing cash, it burdens you more and reflects poorly on the credit score. You end up paying a higher interest rate on cash withdrawal and additional fees like cash advance fees, other finance charges, late payment fees, etc.

4) Keep your credit utilization ratio below 30%

Most Ebanking Hudson prefer you keep your credit utilization ratio (CUR) below 30%. Budgeting, spending cuts, and lifestyle changes can help you pay down your credit card balances and reduce your debt.

5) Opt for forbearance only if necessary

Remember, opting for forbearance does not mean your bank has forgiven or erased your payments in Stillwater or Hudson. If you have a federally backed mortgage in Stillwater, MN,/ Hudson, WI, or you are experiencing financial hardship directly or indirectly due to Covid-19, you can choose a forbearance plan. It will give you a couple of months of temporary pause or reduction in mortgage payments. But do not exploit it and make your credit score go unhealthy.

Conclusion

Covid-19 apart from being a health crisis has also become a financial crisis for many. Repaying existing debt to your bank in Stillwater, MN, / Hudson, WI, and maintaining a healthy credit score can help you protect your financial health.