The coronavirus pandemic has been devastating in many ways, as more than 215,000 Americans have lost their lives and millions have faced unemployment.
If you’ve been fortunate enough to stay healthy and employed, the COVID-19 pandemic may have presented an opportunity to save money or pay down credit card debt, the latter of which can contribute to improving your credit score.
But it’s important to understand that your credit score isn’t just one number—there are multiple types of credit scores. FICO score vs. credit score is a common comparison, but your FICO score is just one of the common types of credit scores (with the other being VantageScore).
Whether you’re trying to improve your FICO score or your VantageScore, these tips can help you boost your credit amid a pandemic.
1. Avoid Making Late Payments
While many creditors are providing financial relief because of COVID-19, if you’re able to make on-time payments, it’s best to continue that practice.
Payment history is one of the biggest factors that make up your FICO score and VantageScore, so avoiding late payments can help you improve your credit. Setting up autopay can help you stay on track with your monthly payments.
2. Pay Down Your Current Debt
With some retailers restricting cash payments to limit contact during the pandemic, you may be using your credit card more often than usual. Be mindful that with increased credit card usage comes increased credit utilization, otherwise known as the amount you owe. Credit utilization is another big influence on your credit score.
Experts generally recommend maintaining a credit utilization ratio below 30%, but keeping that figure even lower is better for your credit.
Limiting credit card use can help you keep this number low, but if that’s not possible, consider reducing your credit card debt by paying more than the minimum amount due or making multiple payments a month.
3. Dispute Errors in Your Credit Report
Checking your credit report on a regular basis can help you make sure there aren’t any mistakes. If you come across an error in your credit report, it’s crucial to report the inaccuracy to the appropriate credit bureau right away, as any delinquencies on your credit report can lower your credit scores. Removing just one inaccurate late payment from your credit report can help bump your credit score.
The Fair Credit Reporting Act requires the three major credit bureaus in the U.S.—Equifax, Experian, and TransUnion—to provide a free copy of your credit report once a year at your request, so you can keep tabs on what information is included in your report without breaking the bank.