A credit score of 680 used to mean something. Now, according to Bankrate.com the best rates and mortgage programs go to consumers with 700+ credit scores. Less than 700, and you may see additional fees.
The ever-changing landscape of credit markets and the economy is making the challenge of credit worse. Even a consumer who pays their debts faithfully may have seen a falling score.
So what's the cause? Some reasons include older and more established cards may have been closed due to lack of use. Credit limits may have been dropped. How much cash is left after paying debts on a monthly basis may also contribute.
So what is one to do?......besides getting debt free (yahoooo!!!)
1. Understand how credit works. People assume that if they pay their bills on time, everything will be all right. Although that's generally accurate, it's only part of the equation.
2. Credit & Debt Optimization; consumers need to look for ways to reduce credit card balances, thereby strenthening the credit score. Reduce interest rates, or move balances to lower rate alternatives.
3. Review credit at least three or four times a year. Monitor for changes that may have occured without anyone's knowledge
4. Last but not least - get debt free .... oh, I already said that!
(thanks to RisMedia Real Estate 5/2009 issue)