January 16, 2009
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News: CC Giants are falling, what about us?
Ever feel like you're in an earthquake and wonder if you'll be crushed by falling structures? If you depend on credit cards then, probably you have, at one time. Survival instincts tell us we'd better run for cover and prepare ourselves. We all know to run but, how many of us know how to prepare. When it comes to the credit card world, we do well to expect things to worsen for a while and to find ways to adapt to this. One certain adaptation is going to require good credit ratings. The ‘good' credit card offers of the near future will only be going to those with good FICO Scores. From a broader perspective, good credit ratings will encompass much much more…home loans, car loans, personal loans, etc.
What used to be considered a ‘mis-step' is now considered to be a flop, like missing a credit card payment. In the near-future, these will likely come back to haunt us. Things are changing rapidly, as the giants begin to teeter. They are being forced to undertake measures they don't like. It's gonna be a hard year and different rules are already being applied. Like the one where a FICO credit card score of 700 would open all kinds of opportunities for the holder. Good treatment and great rates. Now, we will only get that kind of treatment with FICO Scores between 740 and 750.
FICO Scores range between 300 and 850. It used to be that a 600-score was good enough for a typical credit card. That's gone. Over the past six months, the bar has been rising but, not evenly. The past two months have seen things speed up a lot. Now, a consumer will only get a lesser card with a 700 score and, in the near future, 700 may not even make the grade. FICO scores are fairly straight forward but, they're derived from credit reports. Credit reports are not simple at all.
Credit card survival this year is going to hinged on FICO Scores. Again, FICO Scores are derived from credit reports. So, in order to prepare ourselves for the coming CC earthquake, we may need to repair our credit report foundation. For guidelines in how to best achieve this, please refer to the article series entitled: "Surviving the CC Earthquake".