Practical tips to maintain a good credit health during the pandemic

Global information and insights provider TransUnion is reminding Filipino consumers to also prioritize financial health along with physical and mental well-being during this pandemic. The company reminds everyone not to fail on paying bills and doing so in time so as not to hurt his/her credit history.

Anyone who has a credit card, loan, bank overdraft, or other credit agreements with financial institutions has a credit report. That is a record of how an individual manages his credit obligations as collected and aggregated by credit agencies like TransUnion.

Credit reports are often reviewed by lenders, who need to check whether you are a diligent or a delinquent consumer in terms of handling financial responsibilities. Your current payment behavior is seen as a pattern for future references.

“A healthy credit history can help determine a consumer’s ability to access financial products and their ability to get competitive deals,” said TransUnion Philippines President and CEO Pia Arellano. “At TransUnion, we are working with financial institutions to help them better understand consumers so they can continue to provide them with the financial services they need. TransUnion’s data quality assurance team stringently reviews credit data contributions and ensures that consumers are being accurately represented so their access to financial services remains unhampered during the challenges presented by Covid-19.”

Is it possible to keep a good credit report during a pandemic? TransUnion shares these practical and effective tips to keep your credit record clean.

1. Pay bills on time.

Never miss any payment deadline. Be sure to pay even at least the minimum amount stated in your bills on or before the specified date. Ideally, you can automate bills payment and set alarms for due dates. You can check on your bank or lender if they can offer a convenient repayment plan so you won’t stress out your finances too much.

 

2. Set a budget and stick to it.

It is expected for the economic impact of the pandemic to linger until a few years. Thus, it will be best to observe discipline when spending. It will always work if you can set a budget and try to strictly observe it. The new normal is also not a good time to apply for new or additional loan accounts as doing so might hurt your credit standing.

3. Maintain a low balance.

You have ‘maxed out’ the use of a credit card if you have already spent at least 90% of its credit limit. Try to maintain lower balances to prove to lenders that you are a person who uses credit responsibly. Thus, always pay your bills in full and on time.

 

4. Be a responsible borrower.

You can build a strong relationship with your lenders by always being a responsible borrower. Again, pay your bills on time and don’t overspend. Credit limits are reflective of how lenders see your financial standing. By keeping it healthy, you can be sure you can access financial products at competitive interest rates when you need those.

 

5. Stay away from phishing and other scams during the pandemic.

A recent report by TransUnion found that cyber scammers tend to focus on rolling out Covid-19 related scams online. As you keep on using online banking services, be sure you don’t fall victim to fraudulent activities like account takeover or unauthorized account opening that can taint your credit report. Always be cautious about offers that seem too good to be true. Always review your bank accounts to detect any suspicious activity. Don’t provide your PIN or One-Time Password to anyone. Communicate with your banks only via official communication channels.

 

6. Built an emergency savings fund.

It is always a good practice to keep an emergency savings fund that could help cover your credit obligations and keep your credit standing in good condition until you recover and have your finances stabilized again.

As a seasoned and trusted global data steward, TransUnion helps consumers as they pursue economic recovery by helping financial institutions address current uncertainties using the power of information. Building on its database comprising of up to 25 million account points that features a more holistic and insightful view into consumer behavior, TransUnion has started harnessing trended data for richer information for a longer period (24-month payment history) to determine a consumer’s current and possible future financial behavior. This gives businesses quality information to continue supporting customers even in uncertain times like a pandemic.

“Our mission at TransUnion is to use data we have to help businesses and consumers in making smarter financial decisions, especially during difficult times like this pandemic. We hope to continue creating a virtuous cycle of empowered businesses that empower consumers to gain access to financial services that can uplift their lives and financial health, as we believe this contributes a great deal to their physical and mental well-being, too,” said Arellano.