Better Credit Score in 2008 - A Resolution Worth Keeping

In 2007, the world of credit and lending was turned upside down. It was actually a long time coming, but the mortgage lending "meltdown" all came to a head in 2007. And even now, in early 2008, we have yet to see the full effects of this.

But one thing is certain. This lending crisis has made it even more important for consumers to have good credit. By this, I mean that you should thoroughly review your credit report for accuracy and find ways to boost your score if it is lower than the national average -- or even if it's "just plain average."

Let's take our time machine back to the mid 1990's:

Man, it sure is easy to get a home loan back here in 1995. It seems like anyone can qualify for a mortgage, no matter how bad their credit is. They've got these things called subprime mortgages that make it really easy for people to get qualified and buy a home, and they have pretty good interest rates in the first years ... something about an adjustable rate mortgage.

Now let's travel back to the present:

Ouch. That subprime loan sure came back to bite me. As it turns out, that attractive interest rate didn't stay around for long. After three years, my mortgage reset to a higher rate -- a much higher rate -- and I just wasn't able to afford the payments anymore. The bank foreclosed on my home, and from watching CNN I gather that there are a lot of other folks in my situation.

Yes, there are a lot of folks in this situation right now. So many, in fact, that the federal government has increased its scrutiny of lending practices. Back in the 90's, many government officials were happy to ignore the economists who predicted future doom from "easy lending" practices. The money that mortgage industry lobbyists contributed to various campaigns made it easy for these government officials to turn a blind eye and ignore the prognostications.

My point is this. As a consumer, it is more important than ever that you maintain good credit and be cautious about your spending. Lending institutions (those that are regulated anyway) have tightened their restrictions on lending. Thus, it's tougher to get a mortgage loans these days, or a line of business credit, or any other form of financing for that matter.

Be cautious about your spending. Research all of your financial moves so that they are wise moves. Get a copy of your credit reports and scores to see where you stand. Work hard to strengthen achieve a better credit score this year. Make it a year of financial responsibility.

Brandon Cornett is the publisher of Home Buying Institute, a website full of tools and resources for home buyers, such as tutorials, special offers, free mortgage calculators and more. Learn more by visiting