Obtaining Credit is Tougher; Though Not Impossible | CreditShout

Obtaining Credit is Tougher; Though Not Impossible

By Kevin / March 3, 2009

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The bailout bill has caused an enormous uproar lately and the failure of the plan has affected the availability of credit and financing in an adverse way. The banks and financial institutes are strained and many of them are now unwilling to lend money to each other, let alone the average consumer.

Basically, the lending reins have been tightened, but that just means that there will be much stricter criteria and stiffer provisions in which to comply. No longer will there be easy approvals without passing heavy stipulations. It does not indicate a matter of fact that all credit requests will be denied. Simply, it means that the consumers that already have great credit scores probably will not have to worry as much as those that do not have the best of credit.

Finding the credit will not be impossible for the consumers that have excellent credit histories, however, the price may not be worth it because of higher interest rates and fees that are currently involved. Consumers would be wise to check their credit histories and scores before even becoming involved in any type of credit application, regardless of the type of credit, whether it is a bank loan, mortgage or credit card. Checking first with the local credit unions and banks for the best interest rate would also prove to be a smart move to avoid having to pay more for the credit than necessary.

A Few Tips before Applying for Credit

If you absolutely have to obtain credit, for whatever reason, follow a few tips before applying for any type of credit.

  • Get your annual free credit report to see exactly what is listed on your credit file. You can get your history for free at freeannualreport.com, but you will have to pay a small amount to find your actual Fair Isaacs score. For around sixteen dollars you can go to MyFico.com and purchase your score from either one of the two bureaus; TransUnion or Equifax. Finding out your credit score would be advantageous if you are in need of credit, because the average score needs to be around 720 for an approval in some financial institutions.
  • Know the exact contents of your credit report and clean it up if you need to. You will have a better chance for an approval if you are not over indebted or ruined by so many collections and delinquencies. Call the companies that are listed on the report and ask for an agreement to be made for making payments in order to pay them off. Normally, creditors will be more likely to make an arrangement if they are aware that you are serious about paying off the debt. Start paying down your credit card balances also, as well as any personal or installment loans.
  • The last tip is a very important one. Ask yourself if the credit that you will be gaining is absolutely necessary or will it be too much for you. Getting into more debt should be your last thought with the economy in such turmoil and uncertainty. Avoid the temptation to take on more debt; unless it is a complete necessity and follow the tips above if it cannot be avoided. Truly, the availability of credit may be a bit sparser and obtaining credit has become a little tougher; though not entirely impossible.
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