Having a Good Credit Score Is Especially Important Right Now — Here's Why
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Having a good credit score is arguably more important right now than at any point during the past few years.
That's because recent data shows it’s been getting a lot harder for everyday Americans to take out a loan or get approved for a credit card as banks and other financial firms have quickly tightened their lending standards. Tighter lending standards could include outright rejecting applicants, raising minimum credit score requirements, charging more interest and lowering credit limits.
Back in the spring, just after the collapse of several major banks, several financial experts sounded the alarm over a so-called “credit crunch,” a term used to describe the economy when consumers (and businesses) can’t get access to the loans they need — potentially leading to a recession. Now that the broader economy has seemingly stabilized, attention on how the credit crunch is affecting everyday people has waned.
“It’s less in the news because there haven’t been as many bank failures,” says Randall Watsek, a financial advisor at Raymond James. But while full-blown bank failures have been contained since the spring, the underlying banking system still isn't doing well — and it has quietly gotten harder for consumers to borrow money since then.
In other words, the pickier lenders get, the more important a good credit score becomes. And right now, lenders are being especially picky.
