Due to the failure of many banks and financial institutions, lenders and other companies that extend credit to consumers are implementing stricter requirements for approval. Many people who received benefits of having a 700 credit score will now feel the affects of the new bailout plan.
The bailout plan will affect approval for credit cards and loans. This will also affect consumers in their personal and business life. Many small businesses that rely on business credit to purchase business equipment and supplies will also be greatly affected when trying to get approval for credit.
A year ago, a consumer could be approved with a credit score of 700 for any type of loan or credit card with a good interest rate. One year later things have changed.
According to a Yahoo article consumers will now have to have a higher credit score to get approved for a loan or credit card and to get good interest rates. For credit cards you need a 720-750. According to CNW, it will be even harder to get approved for an auto loan; you will need the minimum credit score of 786 to get the very best rate.
To get approved for a mortgage you will need a credit score of 740 to get the best rate. Previously you could get approved for a credit score of 700.
If you have bad credit follow these 5 tips to increase your credit score:
1. Get current on late bills
2. Setup payment plans with your creditors
3. Keep credit card balances at 30% or below the credit limit
4. Don't open a new account more than once every 2 years
5. Don't use credit cards for everyday purchases
It may be difficult to change your spending habits but you will be in a better position to ensure you get approved for credit when needed and this advice will help you maintain a good credit score.
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