As a result of credit card issuers hiking interest rates and lowering credit limits, many consumers are seeing their credit scores take a hit. John Ulzheimer has the top three ways for you to protect your score and even get it higher in this tough environment:
1. Don’t wait for your credit card issuers to cut your limit. Make the assumption that some of your limits will be reduced. If you’re reactionary, you may be too late.
2. Think about opening a new card – this week. The reason is that you want more available credit on your reports to compensate from if (when) your credit limits are slashed. Consider opening the card with a smaller lender like a regional bank or credit union as they are in less trouble than the big issuers.
3. Avoid doing anything that will end up closing your account for good. You may get a letter saying your interest rates have been raised – fight the emotional urge to stick it to the issuer by closing your card. Instead, pay off the balance as quickly as possible and keep the account open to protect your score. Don’t let your anger or frustration compound the eventual damage that could be leveled on your credit.