Smart Credit Tips for a Recession – Pay Attention To Your Credit Scores

It’s official: the country is in a recession and consumers are feeling the pinch of the credit crunch. With banks tightening their lending, it’s becoming more and more difficult to get auto loans, mortgages and even credit cards. However, besides keeping your credit scores up, there are ways to reach your credit goals if you’re diligent.
The credit crunch is affecting consumers in many areas and you may feel the pressure as you try to buy a new or used car, purchase a home or refinance a mortgage, or get approved for a credit card with a reasonable interest rate.
Credit Scores are highly important these days as most credit approval decisions start with your credit scores. The first survival tip for the recession is to improve credit scores – even if you think you have good scores.

Credit Bottlenecks For Car Loans – Home Loans – Credit Cards – Businesses

Auto loans: Available inventory at auto dealerships may be on the rise and there are great deals to be had, but even the most qualified consumers may be having difficulty getting an auto loan.

Home loan or mortgage refinance: More homes for sale at lower prices generally constitute a buyer’s market, but potential buyers are finding that banks won’t lend to them. Home owners looking to refinance their mortgages at a lower interest rate are often surprised to see their homes are worth less than they actually owe.

Credit cards: People with marginal to poor credit (generally a credit score of 650 or less) may have trouble getting approved for a credit card with a reasonable interest rate. Fewer credit card offers are being extended and companies are lowering credit limits and raising late fees.

Businesses: Companies both small and large are affected by the credit crunch as well and may be unable to open new locations or finance new equipment, office space and more. This can result in layoffs and added financial stress on small business owners.

Survival Tips For Credit And Finances To Survive The Tight Credit Crunch

Though it may take a little extra time and persistence, most people will be able to take care of their needs despite the tight credit markets.

If you’re in the market for a new vehicle
Look at used vehicles instead of brand new to help keep costs down and get pre-approved for an auto loan before you hit the car lot. Bring cash for a sizable down payment (up to 20 percent) and plan on getting a shorter-term loan. Make the highest down payment you can. And remember, people with the best credit scores (720 and higher) get the best interest rates and loan terms, so clean up your credit.

If you need to purchase a home or refinance a mortgage
Don’t get discouraged and think you’ll be turned down before you even apply. Make sure you have a minimum credit score of 580, otherwise it’s wise to wait and work to improve your score. If you’re looking to refinance, but your home’s value has declined, talk to your bank and try to work something out. Be prepared to show that you can afford to stay in your home by gathering tax forms, pay stubs, etc.

If you need a new credit card
If you have a good and consistent payment history with your current cards, call the company and ask if they can lower your interest rate or raise your limit. Take steps to improve your credit score; pay down your current credit card bills, pay all your bills on time and look over your credit report to make sure everything is accurate. If not, dispute the negative reports.

If your business needs cash
According to the Federal Reserve, approximately 11 percent of American households own a business. If you’re part of that population and you accept credit cards, using a service like AdvanceMe can provide immediate working capital in exchange for future credit card receivables.

During tough economic times, it’s important to spend wisely and keep an eye on your credit score to better insure access to credit if and when you need it. Before making any large purchases, do your homework and make sure your financial ducks are in a row and you may find yourself surviving the credit crunch relatively unscathed.
Courtesy of ARAcontent