The economic effects of the coronavirus / COVID-19 are being felt in every sector of the American economy, including the real estate market and the housing industry.
With trillions of dollars in economic stimulus promised, but in various stages of delivery (or non-delivery as the case may be), Americans are still facing economic pain that may not have a short-term fix.
In spite of that uncertainty, one thing remains clear. Consumer credit scores are going to have a lot more weight in the credit approval decision process in the days following the peak of the coronavirus emergency in America.
It’s going to take time to begin a full move toward recovering from the crisis, but those who take steps now (and later) to protect their credit will fare better than those who don’t.
Some recent news discussing the rise of FICO score requirements for certain home loans had some wondering if the FHA and HUD are modifying the FHA loan program rules to require higher credit scores.
At press time, there is no official indication from HUD that this is happening. What is apparent is that participating lenders are allowed to require higher FICO scores than the FHA minimums; participating lenders may be revising their credit score rules in the emergency and that is not necessarily happening in a uniform manner.
No one knows how long the mortgage market may be affected by coronavirus issues. But if you are considering a loan in the future, planning ahead always helps but NOW it may be a requirement for you to start saving and budgeting earlier for best results.
Don’t delay in working to protect your credit score, especially during the crisis.
How To Protect Your Credit During COVID-19
Contact all creditors if you think you are going to miss or be late on a payment, it is best to pay all bills on time or make arrangements with your creditor.
In short, don’t ever miss a payment without contacting the creditor. Avoid taking out new credit unless absolutely necessary.
Borrowers may learn about mortgage relief and credit card payment relief programs offering to suspend monthly bills temporarily, but unless you make arrangements with the creditor you don’t have any true protection for your credit score.
Any payment relief options offered usually require you to contact the company to opt-in. If you do not opt-in, you don’t get the protection.