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How to Protect Your Credit in a Slow Economy


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TERMINOLOGY

Learning how to protect your credit in a slow economy is an important part of your financial health. Your credit is one of the most critical things that you have and during a slow economy, you need to make a conscious effort to protect it. Here are a few things to consider about how to protect your credit in a slow economy.

Paying Bills on Time

The first thing that you will want to keep in mind is that you need to pay your bills on time. This goes for every single bill that you have from your electric bill to your credit cards. All of your accounts need to be paid on time because they will most likely be reported to the credit bureaus. The most important factor when determining your credit score is whether or not you pay your bills. As much as 35 percent of your credit score is going to be made up of this one aspect. If you have one late payment on your credit report, it can potentially lower your score by 50 points or more. Therefore, you need to make every effort to pay your bills on time.

Monitoring Credit Reports

You should also make time to monitor your credit reports. You will need to regularly get a copy of your credit report from the credit bureaus to do this. You can actually get one free credit report every year from all three of the major credit bureaus. You should be able to visit the websites of TransUnion, Experian, or Equifax to request a copy. If you want to see your credit score, you will need to go to FICO to get copies of your credit reports. It is important that you monitor your report so that you will be able to determine if there are any mistakes or omissions on it. If you find something, you need to contact the credit bureaus to make sure that it is resolved.

Deal With the Car

Another step that you might consider taking is refinancing or selling your car. When the economy is slow, you may need help making all of your monthly payments. By refinancing your car, you are going to be able to significantly lower your monthly payment in many cases. If you sell the car, you can completely eliminate one of your biggest monthly payments. This is especially true if you have a newer car that has a large loan balance against it. This will help you stay on top of your finances and avoid making any late payments.

Credit Counseling

You might also want to consider working with a credit counseling company in order to get help. Credit counseling services are available and they will sit down with you to help you determine what you need to be doing. They can help you come up with a plan for your finances and help you get back on track.