How to Preserve Your Credit Score During Tough Financial Times

With the ebb and flow of the economy, it’s expected that there will occasionally be tough financial times. During these periods, you might struggle financially and have trouble budgeting for your responsibilities. When you encounter these problems, it’s only natural to question how you will keep your credit score in good standing. For tips and tricks on how to keep your credit score healthy, continue reading below. 

Continue to Pay Bills on Time

While it might be challenging, do your best to pay all your bills on time. Payment history has the biggest impact on your overall credit score, which makes this a crucial step. If you don’t think you’ll be able to make a bill payment on time, it’s best if you take the initiative to communicate with your lender and discuss alternative payment options.

Communicate with Lenders

If you’re having trouble making your payments, you should make it a priority to communicate with your lenders. If you know you’re going to miss a bill payment, let the lender know as soon as possible. Lenders typically have obligations too, so any notices will likely be appreciated. 

Once you open the lines of communication, the idea is to work with the lender to delay the due date of your payment, make a partial payment that is considered full, or create a payment plan that works for both of you. Part of your discussion should involve how you can set up solutions to avoid any impacts on your credit score. 

Think Twice Before Relying Heavily on Credit 

During tough financial times, you might think it’s a good idea to start relying heavily on credit. However, there are a couple of reasons why you should take caution when taking this route.

First, depending heavily on credit during these times can lead to even tougher financial situations. When you rely on credit, it’s easy to think, “the financial burden will come later, so I’ll spend as much as I want now.” Thinking like this can potentially lead to spending large sums of money that will be hard to pay off later. Discipline must come into play here to avoid even more hardships down the line. 

Another thing to note when depending on credit is your financial attitude. Attitudes and habits go a long way in personal finance, and keeping your financial integrity should be one of your priorities. Once you let it slip, it can be challenging to get back on track. Keeping your spending habits in check is not only good for your credit score, but it’s also good for your wallet.