How To Fix Your Credit Post COVID-19

Posted on February 10, 2021 in Money

The effects of COVID-19 are going to be felt for decades. The personal, political, and economic losses that everyone has suffered will be in our collective memories for a long time going into the future. However, at some point, we will all have to rebuild and start taking steps forward to reach the peaks our civilization saw before the pandemic hit. Thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, forbearance and credit reporting requirements have been changed by lenders and creditors. 

Additionally, some lenders have been saying they will not be reporting late payments to credit agencies and are waiving late fees for borrowers due to the pandemic. However, these are case-specific examples and may not apply to everyone. 

Regardless, there will be a time when financial stability is achieved, and then we can look toward improving our credit scores back to where they were pre COVID or preferably have them reach even higher heights. Read on to find out what to do right now, or be sure to read our guide on how to fix my credit myself.

What Can Be Done Right Now

Unfortunately, this pandemic is still going on and may for some time. A few steps can be taken right now to help stop the adverse effects on your credit report. The lower the score falls during this pandemic, the easier it will be to fix and improve it when we eventually get on the other side of this. 


As mentioned previously, the CARES Act was designed to help people keep some financial stability in these unstable times. To protect consumers against being reported as delinquent in their payments, the CARES Act calls for creditors to adjust how they report their customer’s accounts. 

The CARES Act also created relief programs that allow for extra time for eligible Americans to pay their mortgages, rent, credit cards, and loans. If a loan is current when a borrower seeks out a relief program, the lenders must report to the credit bureaus that the loan is existing. 

If a special payment arrangement is made, then the CARES Act will forbid the lender from reporting negative information, such as delinquency, on the borrower’s credit report. 

It is crucial to seek out these special arrangements before missing payments, or the account will be reported as delinquent until made current. The CARES Act is not a permanent solution and is currently set to expire on March 14, 2021. The expiration date may be extended.

Monitor Credit Report Regularly

It’s imperative to monitor your credit score. Under normal circumstances, it is a good idea to utilize the one free annual credit report from each of the three main credit bureaus. Through April 2021, the bureaus are offering free weekly online reports. 

It would be wise to check in regularly and find out what is negatively impacting your score and try to stop it now instead of fixing later.

Make Payments Or Contact Lenders

Payment history makes up 35% of a credit score, so maintaining payments on time is the most important factor. If you can’t make payments on time, immediately reach out to the lender and seek financial assistance. 

The CARES Act has made such relief opportunities and special payment arrangements much easier to achieve, and it will go a long way to helping your score if you can make these arrangements before the loan is delinquent.

Financial Hardship

Some major credit card companies have offered assistance for their consumers in the event they claim financial hardship. In some cases, these companies have been willing to increase credit lines, waive late fees and forgo interest charges. 

There may be some specific criteria necessary to enter into such an agreement. Eligibility for these programs will vary for every credit card issuer and borrower, but it is worth looking into if credit card debt is affecting your credit score. 

Recovery In The Future

There is lots of good advice on how to best fix a credit score, and for the most part, that advice will hold in the future. This will be the step by step process to keep in mind while attempting to fix your credit score when the time comes:

  1. Get Credit Report

Hopefully, you already have been keeping up with your credit report and have a very firm idea of where your score is located. However, if not, then the first step will be to get a copy of your credit report.

  1. Thoroughly Check For and Dispute Errors

Ideally, there will be no errors on your report, but given the special circumstances of the COVID-19 pandemic, there may be some. If you have been following your credit report closely, you will have already noticed and disputed these fraudulent marks on your report but if not, this step will be crucial. 

Under normal circumstances, it’s estimated that as many as 25% of all credit reports contain serious errors resulting in a denial of a credit application. In these uncertain times, with various new and unregulated programs and agreements, it is possible there will be a few mistakes on your report. 

Some common mistakes to look for include:

  • Incorrect personal information such as misspellings or wrong addresses
  • Accounts that do not belong to you
  • Missing accounts that are unlisted
  • Incorrect public records such as bankruptcies or foreclosures
  • Inaccurate accounts that may be listed as open when they were closed
  • Duplicate accounts
  • Fraudulent activity
  • Incorrect inquiries
  1. Pay Late or Overdue Accounts

The CARES Act did determine and safeguard how debt is being reported to the credit bureaus, but it is not a permanent solution. Accounts that were not in good standing before COVID-19 or fell behind because of COVID will still need to be repaid eventually. 

A few options are available in terms of eliminating some of these debts without repaying, but those are not guaranteed to work. The best solution is the most simple one: to repay the debts as fast as possible. They do not have to be repaid in full, but if they can be brought to current status, that will go a very long way to stabilizing and eventually increasing your credit score.

  1. Increase Credit Limits

The goal during this step is to lower your credit utilization ratio. This factor is one of the most significant impacts on a credit score, accounting for 30% of it, so it is only slightly less important than payment history. 

Credit utilization ratio is the amount of credit currently being used by the total amount of credit possible. Another way of putting it would be how much is currently owed divided by the credit limit. 

An easy example would be if someone has a credit card with a maximum limit of $5,000 but owes $1,000; their credit utilization ratio would be 20%. Ideally, credit utilization ratio should remain under 10% for best results and should never exceed 30% if possible. 

By taking out new credit cards or paying off existing ones, the credit limit available to you would be higher, making the credit utilization ratio lower and improving your credit score.

  1. Make Payments On Time

Once everything is caught up, it is imperative to stay on top of payments. Payment history is 35% of a credit score, so the more current the payment, the less chance for delinquency on your credit report. Any new loans, debts, or credit cards should be kept current as long as possible while attempting to catch up with the other ones that may have fallen behind.

The Takeaway

There are many ways to keep your credit score from falling too far during this pandemic, and they should be utilized if needed. Once life returns to normal, there are a few steps to get your score back to where it was pre-pandemic or maybe even higher.

Even in the best of times, getting out of debt and improving your credit score can be challenging, but there are plenty of options. Navigating this in a post COVID world may be even more complicated than normal, so it is important to try to maintain your credit score and have it drop as little as possible in the meantime. 

Related blog posts

Need expert financial advice?

Let TurboFinance connect you with the best consulting services and resources to help you take control of your finances and find a path to build wealth.

Get A Free Consultation Today!