Covid-19 and your credit?

As the country faces an economic crisis, the coronavirus pandemic has left many citizens with a lot of questions. They believe that the effects of this pandemic will be felt for many years, even after the virus has been contained.

One thing that might be disturbing you is how your credit score will be affected by this pandemic. Here we discuss how you can safeguard your credit score and the steps the creditors and lender are taking to make things easier for borrowers.

Q: What are the steps you can take as a consumer to protect your credit score in the face of the coronavirus pandemic?

The following practices can help you minimize the negative effect of Covid-19 on your credit score:

  • Pay what you can afford: If you have a source of income, do not stop repaying your loans. Pay the little you can manage, depending on how you agree with your creditor or lender.
  • Seek help: Creditors and lenders are a bit understanding now. If you cannot make repayments on your loans, reach out to them and see if there’s any way they can help you.
  • Add consumer statement to credit reports: It is good to explain your situation by adding a brief statement to your credit reports.
  • Keep checking your credit reports: You can get your credit report for free from the credit bureaus. Checking these reports can help you know which areas need urgent attention.

Q: What steps can you take to prevent getting into a debt trap during this coronavirus pandemic?

The reasons to get into debt are plenty; pressing bills to settle, medical loans, and student loans are just a few of them. To mitigate the situation, observe the following:

  • Talk to your creditor and lenders: Don’t shy away from talking to your lenders. Some can agree to defer your payments, while others may offer you better loan terms like lowering the interest and extending the payment period.
  • Budget well: Keep your credits as low as possible. Budgeting means you only spend on what is necessary and also live within your means.
  • Keep repaying your loans: It is easier to negotiate with your lender if your repayment history is good. Failing to submit your monthly loan repayments can lead to higher interests and penalties, which will affect your credit score.

Q: What if I have been laid off or I am facing a temporary closure, or I have fallen into debt because of coronavirus?

If you are facing a financial hardship caused by the coronavirus, the first thing to do is to discuss with your creditors and lenders and see what they can do. Fortunately, these lenders and creditors already know that many people are in financial crisis and are already taking steps to help consumers face their financial burdens.

  • FHFA (The Federal Housing Finance Agency): Freddie Mac and Fannie Mae (both overseen by FHFA) recently directed mortgage servicers to set up a moratorium on all evictions and foreclosures for borrowers who are facing financial problems caused by Covid-19. If you have experienced a financial crisis, report to your lender and you can be relieved for some time. For more information, visit and
  • The education department: If you have a student loan, you can stop repaying it for a period no less than two months. For more information on this, visit and

Q: How are missed payment allowances, deferred payments, and other actions taken by issuers of credit cards reflected on your credit card reports?

It’s worth remembering that even a single missed or late payment will impact negatively your credit score. These missed and late payments will be reflected on your credit reports for 7 years.

It will take at least 30 days for late payments to reflect on your credit report. This means making payments within 30 days after the due date can stop the late payment from reflecting in your credit report. However, you will still have to be charged interest for the late payment.

What matters most is that when you are facing financial hardship due to coronavirus, is not hesitating to discuss with your lenders and creditors. They will definitely find ways to make things a little more bearable for you. They can even waive the interest for late payments or change your loan terms to make them friendlier.

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