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Banks reducing loan, charge card limits even for their best customers
Executive Summary By Susan Chandler
Finding new credit or just holding on to what you have has gotten extremely difficult. And the impact is not limited to consumers who are swimming in debt or have abused credit in the past.
“We have definitely been hearing from a lot of people, even those with great scores, that they have been getting their credit lines cut or closed,” said Gerri Detweiler, credit adviser for Credit.com, a personal finance Web site.
While it is the financial institutions that decide whether to make or continue a loan, credit experts say there are some proactive steps you can take, and a rather lengthy list of things to avoid, to make yourself appear as creditworthy as possible.
A simple step in your search for credit is to expand the horizon of institutions with which you would consider doing business. Think about becoming a member of a credit union, and keep an eye out for new community banks that may be springing up and appear eager to win business.
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But it’s important to remember that lenders have parameters they monitor to determine someone’s credit worthiness. If you:
- Fall behind on your mortgage or car loan, it will set off alarm bells at every company that has extended you credit.
- Start running up bigger balances on your credit cards than you have in the past, that’s another red flag.
- Used to pay an extra $50 a month over the minimum on your credit card but now pay the minimum, that could cause the card issuer to cut back your line.
- Always paid on time, but now the check arrives a few days late, that’s an unwelcome change to your payment pattern, and there are likely to be consequences.
Below you can find tips for maintaining good credit score:
5 tips on maintaining credit
1. Don’t run up bigger balances on your credit cards than you have in the past.
2. Keep outstanding balances below 50 percent of your credit line.
3. Expand the group of financial institutions with which you would consider doing business.
4. Check your credit score at CreditKarma.com or MyFICO.com.
5. Make sure your credit report is free of old and inaccurate information.
Another related article here: Bank Credit
[...] If your rates have gone up and there’s no way to change them, and credit card debt is threatening your financial well-being, you might want to consult with a credit counselor to help you get out of debt. Legitimate credit counseling firms are affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies; Unrealistic promises. Some companies falsely promise that you can settle your debts for little or no money, without hurting your credit rating. Legitimate credit counseling services help you pay back what you owe, albeit at lower interest rates, and acknowledge this is likely to effect your credit rating and ability to obtain new credit. [...]