Should you worry about your credit score during a Recession?

You cannot turn on the TV, surf the web or listen to the radio without hearing about credit reports and credit scores. You might wonder what the buzz is all about. With the current tightening up with lending, your credit scores have become more important than ever. Let’s assume you want to get a home, and you have not checked your credit report in years. You probably don’t have the personal assurance that your credit report is what is should be. Maybe you know you have had some blemishes on your credit report. What ever the case is, you need higher credit scores these days to get approved for any loan.

You might notice car dealerships and all sorts of businesses going out of business. A lot of these businesses cannot get credit from lenders to continue doing business. So they have no choice but to close their doors. So just imagine if you have low credit scores or a credit report littered with collections what your answer is going to be with any creditor.

If banks have learned one lesson from the recent loan nightmare, that lesson is your credit score means a lot. In the past you could get loans with low credit scores, but that is not the case anymore. With the recession taking place you can be for certain that banks cannot afford to lend money to borrowers that are high risk. High risk borrowers are borrowers with low credit scores.

During a recession you might find yourself needing a loan, and with the bar being raised on credit report and credit score requirements you can be for certain that your credit score will need to be as high as possible to get a loan. Some banks will not lend to you unless your fico score is 680 or above.

If you are not for sure what is on your credit report or maybe you have no idea what your credit scores are. I would recommend getting a copy of your free credit report now. Be a educated consumer about your creditworthiness.

CreditScoreQuick.com your resource for credit reports, credit scores, credit cards, and free credit report repair advice.

How the 2008 financial crisis will affect you

Well its official we are in a recession due to the amount of time our country has seen a loss in revenue for many companies. Also with un-employment being at 6.1% and banks still failing you can rest assure that there are going to be some drastic changes with credit requirements. In this article I wanted to discuss in detail how this will affect you and your family.


Your credit score
There has never been a more important time in history to manage your personal credit score than now. With current matters in our credit sector, banks will more than likely over compensate for what is going on. In other words they will get too strict on credit requirements.

For example:
• Higher credit score requirements
• Higher down payment requirement
• More savings in the bank requirement
• Less leniency on past credit issues

Savings
During the past there was lots of money flowing to cover any unexpected expenses. With the current economic situation most will not have that extra money. The reason is there are less overtime hours, no bonuses, and maybe not many raises around the corner. When a sector like real estate takes a dive it affects all other sectors of our economy. So with the increase in cost of goods sold we need to save more and cut back on spending. We need to have at least 6 months worth of income in the savings to survive a economic downturn like we are currently in. So my point being the ultimate goal here is to save your money.

Loss of Job
During times like these more and more people will loose there jobs. So you may find yourself in the market for a new job. Guess what companies are doing these days? They are checking your credit report to see how responsible or irresponsible you are. This is just another reason to stay on top of your credit and finances.

Theft
Obviously when times are bad some people go to desperate measures to keep afloat. Sometimes those measures are theft of your personal items and personal information. This is another reason to check your credit report to see if anyone has stolen your identity. It only takes a few mistakes and someone is out charging in your good name.

I just wanted to pinpoint some reality issues during a recession. If you did not know any of this, now you do. Get a recent copy of your credit report and protect you and your family today.




CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and free credit repair advice.

How a recession can affect you.

I thought this was a good story about how identity theft , credit scores, and a recession can affect anyone. Its does not matter whether you are poor or rich, your life can change in a instant.

It's an economic downturn when others suffer financial reversals, but it's a recession when it hits your home. In my case, it was a full-blown depression.

Although I knew what it was to experience lean times, it never seemed possible that I could become destitute. My first challenge was to recognize that was exactly what was happening. My next challenge, other than to cope, was to find a way to re-emerge.

Think it could never happen to you? So did I.

My hardships started in the mid-1990s, when I became an early victim of ID theft. Sorting out the charges took years, but I eventually negotiated with creditors to accept payment for only the charges that were legitimately mine. And then I closed the accounts.

With that behind me, I left a comfortable executive's life to become an independent consultant. Corporate chiefs paid me handsomely – so much so that I paid off my mortgage. I was debt free, and times were good.

But the Prime Time of Life celebration was short-lived. In rapid succession, my top two accounts stopped operating in the U.S., leaving me with unreimbursed expenses and collapsed receivables. I cannibalized my savings and made ends meet – until 9/11.

Still, I managed – by selling personal items on eBay and working toward a business rebound. I started building a warehouse to hold supplies – and then the unthinkable happened. My hand was caught in a table saw, and I went from bleeding in an ambulance to hemorrhaging financially.

I, who had never taken unemployment checks, was unable to access any so-called safety nets such as Medicaid.

Then, in gilded-lily lunacy, the IRS seized my income for "unpaid back taxes," citing credit card charge-offs that were in fact the result of identity theft.

Using what capital possible to pay the immediate – utilities, insurance, food – I began defaulting on bills, including property taxes. My once golden credit was ruined.

Welcome to the Under World, where Washington-approved institutions legally hang anyone who's on the ropes.

• I was rejected for work because of "low credit scores," a nonstarter under many companies' HR rules.
• My car insurance increased $100 a month, although I had filed no claims.
• Home insurance rates shot through the roof with high-risk underwriter policies.
• My credit card limits fell from $5,000 to $300. Securing even that privilege cost me a $100 deposit – on a card averaging 20 percent interest rates.
• Utilities began demanding deposits, despite my model customer history.
• In a final irony, despite outright owning my house I was denied any form of home equity loan – even with willing co-signers. Banks cited my poor credit ratings.

Broke but still unbroken, I got by. So recently flush and proud, I found myself pulling weeds on an East Texas estate for $10 an hour and working part time in a flea market. I drove for two years without valid auto registration; I was unable to get a current inspection sticker without maintenance on my car that I simply couldn't afford. I relearned how to save, shopping at Sam's, Fiesta and Big Lots. I bought and cooked in bulk and froze my food.

But the paramount key to my rebuilding was a reaffirming personal commitment, believing as I do that condescending arrogance when you're on top is a far greater failure than being broke.

It took me four years to piece my financial life back together. I won my case with IRS. My business flourished. I outlived the negatives on my credit report. Finally, I attacked those delinquent property taxes – now tripled with accrued interest, court costs and attorney fees – just before the city poised to seize my home.

By 2006, I was experiencing periodic flashbacks of what I later recognized as happiness.

I learned so much throughout this ordeal, foremost that when the chips are stacked against you, our system encourages the piranha-like free-market capitalists to pile on those who are down for the financial count.

Yes, my retirement funds are gone. But there is always abundant reason to celebrate life with caution and reverence. And share with stunned skeptics how my case is institutionally endemic rather than an anecdotal anomaly.

If this could happen to a well-connected, solvent homeowner, what does that say about those renting, leveraged, alone? Or about a Fair Credit law passed in this decade making it harder to file for bankruptcy than a divorce?

Still feel immune? All it takes is the perfect storm. And you know Texas weather.

Dallas Morning, News.

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