As anyone reading the news today knows, the difficulties in the credit market are seeping out of the sub-prime markets and into the prime credit realm to a greater degree than was the case previously. That is primarily due to the significant losses lending institutions have sustained during the sub-prime credit meltdown. There’s just less liquidity flowing these days. However, there are steps you can take to reduce the chance that your personal credit and finance situations are negatively impacted by the current fiscal situation. Making sure to perform maintenance on your credit standing can help.
Just like you maintain your auto or your home, you should perform routine maintenance on your credit standing. It’s all too easy when you’ve done the hard work of being informed and disciplined enough to achieve a great credit score and know that you have a terrific credit standing to become complacent and neglect to do the simple maintenance tasks that can help to ensure your continued credit well-being.
Taking the time to do a yearly credit report check is simple and important. You should get your report from all three of the major reporting agencies and do a slow, careful read. Look for any errors or unfamiliar charges and take prompt action to correct any inaccuracies. Not only does this help you to prevent mistakes from damaging your credit score and standing, it can also help you to detect unauthorized use of your credit, such as the case with identity theft.
Access your credit situation yearly. Do you have open accounts that you rarely, if ever, use? You may want to consider closing them, which will reduce the debt you could potentially amass. Lenders, especially during these hypersensitive times, can be a bit put off by the prospect of you being able to take on a lot of debt quickly, as that could interfere with you making payments owed to them.
If you have significant debt, even if you are managing it fairly well, it is far better for your overall credit standing – and financial health, for that matter – to put more effort into paying it off instead of just shifting it around. Balance transfers and the like can be tempting, but they may not be the best options for your credit standing over the long-term.
Paying off small and comparatively insignificant debts is also good for your overall credit rating. Sometimes those smaller debts and transactions slip the mind, and reappear as troublesome entries on an otherwise stellar credit history. Making sure to make even those small, seemingly unimportant payments on time is also important, and a great habit to have.
The important thing to remember about today’s credit situation is that there is credit available. The best way to ensure that you continue to have the relatively trouble-free access to credit that you enjoy with a good credit score and standing is to be sure to perform regular credit maintenance. Investing that time and effort can help to reduce the chance that you could be negatively impacted by the credit crunch we’ve all been hearing so much about.