Younger generations are taking on financial responsibilities very early – for many, as soon as we start college. Since the start of the pandemic, it has been tough to maintain a good credit score. It’s a real shame since we all depend on good credit for most of the biggest financial decisions in our lives, such as buying a home, starting a business and even getting a job. What causes bad credit, and how can we fix it?
What hurts our credit?
According to the New York Federal Reserve, at the end of last year, the average American household debt was $146,000, up 3.8% from the previous year. With more debt comes bad credit; with bad credit comes poor rates for buying a car, applying for a loan or even bankruptcy. And unfortunately, this makes people desperate to fix their financial portfolios.
This desperation leads people to be more susceptible to new scams, scam artists and cybercriminals. In 2020 alone, the FTC received over 1.4 million reports of identity theft, many of these caused by online scams and security exploits. As you may know, when your identity is compromised, it can lead to a plethora of problems, including damage to your credit score.
How to check your score
An important fact to note is that you need to know where you stand. The 3 biggest credit unions (Experian, TransUnion and Equifax), which normally provide free yearly reports, are providing free weekly reports at the moment. It’s important now more than ever that you check your score regularly so you can avoid any unwanted surprises in your report.
Do you need credit help?
If your score looks disappointing, all hope is not lost. There is a viable option for those looking to get their credit back up to a high score: credit help. There are many ways to improve it, but depending on the gravity of your situation, a professional credit repair company might be best for you. If you’re interested in reading more, check out Money.com’s guide to navigating credit repair or how to get items removed from your report.
Protect your information.
There are ways you can protect your identity and your credit as you transition towards establishing your roots as an adult. First, make sure that you stay on top of your credit card payments by monitoring your activity and not overspending. Second, you should invest in personal security like identity theft protection software, VPNs for when you travel and password protectors (gotta keep those phishing emails away from your data).
Don’t take unnecessary risks.
Lastly, make sure you are not taking any unnecessary risks when shopping online or in-person, such as giving your credit card information to a site you don’t fully trust. Also, don’t make a big purchase – like a car, for example – when you know you can’t afford it; this has led people to max out their accounts and rack up debt. Stay on top of things, and you’ll avoid a lot of unnecessary headaches!