The COVID-19 pandemic has shaken the global economy, disrupting many businesses and people's finances. Some who are having issues repaying their loans have reached out to lenders for options. As that is a great step to take, it's also important to be mindful of your finances and credit, and not fall victim to scams. Unfortunately, debt collection scammers who are taking advantage of the crisis have been on the rise. As you are working with a lender on forbearance or other repayment options, try following these tips and utilizing our member services, such as SavvyMoney, a free credit score monitoring program to help you through the process while staying financially protected.
1. Obtain Written Documentation:
Lenders should document their arrangements with you. When it comes time for debt collectors to collect owed money, they are required by law to provide "validation notice" of your debt in writing. The notice must say how much money you owe, the name of the creditor you owe it to, and what to do if you don't think it's your debt.
2. Don't Fall For Debt Collection Scams :
These scammers will often impersonate a loan company or government agency demanding they need to collect overdue payments with aggressive threats. If you are unsure of it's a scam, ask for their name, company, street address, and telephone number. DO NOT provide personal or financial information.
3. Contact Lender if Unable to Make Payments:
Avoid the dreaded late payment fees, penalty interest rates and damage to your credit score if you feel your at risk of not be able to make on-time payments of your loans. Lenders may be offering several options during the pandemic.
4. Apply For a Balance Transfer Credit Card:
If using responsibly, a balance transfer credit card could be a great resource in consolidating your debt. By transferring balances to a lower interest credit card, you can reduce your monthly payment amounts, which can help your finances in the long term. Explore Members Choice Personal Credit Cards, which currently offer a 0% intro APR* for 6 months on purchases, and a 0% intro APR* on balance transfers in the first year.
5. Monitor Your Credit with SavvyMoney:
Actively monitoring your credit report will help you make sure it accurately reflects the lender's repayment efforts and keep a lookout for fraudulent activity so that you can report before it causes damage to your credit history and scores. Members can obtain their VantageScore 3.0 credit score and report, get free credit monitoring and alerts, loan rate comparisons, and more with SavvyMoney. The SavvyMoney widget within Online Banking will automatically update your credit score and analysis every 30 days without any action from you. Learn more and sign-up for SavvyMoney here.
*Annual Percentage Rate