The COVID-19 pandemic and the recent conflict between Russia and Ukraine has led to an economic recession. This has impacted people’s credit scores in several ways.
Here are some ways the recession may be affecting credit scores:
- Late or Missed Payments: Many people have struggled to keep up with their bills due to job losses or reduced income during the pandemic. Late or missed payments can negatively impact credit scores, as payment history is one of the most significant factors in calculating credit scores.
- Increased Credit Utilization: With financial uncertainty, some people may have turned to credit cards or other forms of credit to make ends meet. However, high credit utilization levels can negatively impact credit scores, indicating higher risk to lenders.
- Hard Inquiries: If someone has applied for credit during the recession, such as a loan or credit card, lenders may have performed a hard inquiry on their credit report. Multiple hard questions in a short period can negatively impact credit scores.
- Foreclosures and Bankruptcies: With the recession leading to job losses and financial hardship, some people may have filed for bankruptcy or faced foreclosure on their homes. These events can significantly impact credit scores and may take years to recover.
The recession can significantly impact people’s credit scores, particularly if they face financial hardship or struggle to keep up with their bills.
However, it’s important to note that good credit habits, such as paying bills on time and keeping credit utilization low, can help mitigate some of the adverse effects of the recession on credit scores.
Getting professional help from a credit repair company can also be beneficial. A reputable credit repair service like The Oasis Firm can work with individuals to help identify and address any errors or negative items on their credit report that may be dragging down their scores.
Additionally, we can provide helpful guidance in creating a plan to improve credit scores over time. We can help you restart your financial journey and reach your credit goals.
Contact The Oasis Firm today to get started!
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