Protecting Your Credit Score in the Credit Crunch

Protecting your credit score during the credit crunch is absolutely vital if you want to get through this period of economic turmoil alive. Credit card issuers are beginning to feel increasingly skittish regarding risky credit borrowers because debt and card holder delinquency are greatly increasingly, and because the housing market and job market are both declining, many credit and loan issuers are eager to limit their risk as much as humanly possible. Here are some tips for protecting your credit score and for surviving the credit crunch.

1 - Attempt to stay in the good graces of creditors and lenders.

You can do this by keeping credit and lending accounts active, paying your balances down relatively quickly, and maintaining a credit score that is above 700 from all three credit bureaus. Here are a few other tips that will also help you stay in the clear, keeping your credit score healthy:

2 - Verify the status quo by making sure that you still have the terms that you original had.

Not only should you check to make sure that that your interest rate is the same, but you should also make sure that your grace period for late payments and credit limit are also still the same. Sometimes grace periods can be shortened by issuers if they are not generating enough revenue for the company.

3 - Avoid activity that may be considered to be atypical.

Consumers tend to spend in patterns, so if you spend in an atypical way it may have a negative impact on your credit score, attracting a certain level of scrutiny from your credit card issuer. If you have specific trends for how you use your credit, you should make sure to follow that same routine.

4 - Keep up your history of good payments.

You should make sure to always make your payments on time, as well as always paying off your balance every month. Keep your balance low at all times and never ever max out a credit card. The higher your balances are, the riskier you tend to look. If you do have to run up a balance, pay it off as soon as you possibly can. And if you cannot pay the entire balance off each month, pay as much as you can rather than simply paying off the minimum amount due.

5 - Avoid neglecting your other bills.

Why? Because some companies like utility companies and apartment companies can report to the credit agencies just like credit card companies do. This means these things can damage your credit score just like credit cards and loans can, and falling behind on them in favor of paying off your credit cards is not wise no matter how helpful it may appear to be at the time.

6 - Monitor your credit reports.

Make sure that they constantly contain accurate information. Information that is inaccurate can really damage your credit score if you are not careful. You can monitor your credit score using Credit Karma for free.

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