Managing your credit health during the coronavirus downturn can be overwhelming. It’s hard to know where to start when money is tight, movement is restricted, kids are out of school, and life has generally become more hectic. In part I we suggested places to look for forgotten debt that could easily be lost in the shuffle.
In this article, we cover tips to take to gain control and reduce your stress once you’ve identified overlooked debt. In summary, this involves planning as far ahead as you can manage (which might not be very far in today’s uncertain climate) and getting access to resources and information so that you emerge from the covid-19 lockdown with the strongest possible credit standing.
Even if you’re only paying the minimum balance required, try to pay your monthly bills by their due date to avoid negative marks on your credit score. This way, you’ll also be avoiding charge-offs, late payment penalties, and other potential fees that can stay with you long after the pandemic ends.
When it comes to budgeting, it’s very easy to say “tighten your belt and spend less”. But what do you do when that simply isn’t possible? You make a budget. Sitting down and examining your income and outgoing expenses will give you greater control over your finances. Most of us have a (fairly accurate) running tally in our heads of exactly where our money goes; go through a budgeting exercise anyway because seeing it in black and white – so to speak – will help you to plan ahead. You might even uncover a surprise or two.
As part of employment benefit packages, employers (mostly SME size to larger corporates) sometimes offer various insurance policies that might come in handy right now. Check your life insurance policy details for payment protection insurance, mortgage payment protection insurance, sickness, and unemployment insurance. If you’re a self-employed freelancer, you might have taken out income protection insurance.
These types of coverage are easy to forget since they are often bundled with life insurance policies or mortgages. It’s worth a check!
The last thing you need right now is to fall victim to identity theft. Fraud and coronavirus-related scams are on the rise so be vigilant about your personal information, monitor your bank accounts closely, be careful of where you click online, and stay suspicious of requests for money over the phone, email, and social media.
It is perfectly reasonable to seek financial assistance when you need it, and there are a number of free services available (moneyadviceservice.com). Working with personal financial management and/or debt management counsellors will help you to gain control by setting a budget and get expert advice on how to make your current circumstances workable.