Malawi: Managing Your Credit Through Financial Hardship
With COVID-19 affecting people’s jobs and most importantly incomes in Malawi, millions of consumers and businesses are facing some tough financial choices – but it’s vital that people stay in control of their credit through this stressful time.
According to TransUnion’s data, consumer debt balances have increased sharply, almost doubling since December, as growing numbers of consumers turn to unsecured credit, including personal loans, to cover everyday expenses.
If you’re going to struggle to pay your bills in the coming months, it’s critical to talk to your lenders upfront, says Rodgers Lungu, country manager at TransUnion.
Here are three ways to manage your credit through the COVID-19 pandemic, and beyond.
Protect your credit score
As income streams shrink in the coming months, people may find themselves having to use their home loans. The important thing is to pay all of your bills on time if you can. Paying on time, in addition to other factors used by Financial Institutions, affects your credit score the most.
It’s even more vital than usual to protect your credit score during tough times, because access to credit can often help you get through the rough patches.
Talk to your lenders
If money is tight and you’re worried you’re going to miss a payment or two, it’s best to contact your lender before the payment is due. You can explain your situation and ask whether they can offer any assistance.
Consider contacting your bank or insurance policy issuer if you’re affected by the COVID-19 pandemic. You may qualify for some leeway.
Stay in control of your credit health
It’s important to check your credit report to make sure all your account information is correct. You can get one free credit report each year from any or both of the credit reference bureaus in Malawi such as Transunion. That way, if you contact your lenders to discuss your financial situation, they’ll have correct data about you or your institution to work with.
“We know many people are feeling anxious about their finances during this challenging time. Organising your credit information and maintaining communication with your lenders are two ways you can help stay in control of your credit health during times of uncertainty,” says Lungu.
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