Get Smart About Debt – Rule #5

Rule #5 of “Get Smart About Debt” is to keep up the good behavior. The tougher lending standards ushered in by the credit crisis are likely to stick around well after the recession is gone. Helping cement them are new laws that focus on consumer protection – such as stricter rules for credit card issuers, which reduce their incentive to deal with less creditworthy customers.

An even bigger factor leading to the longevity of tighter credit is the disappearance of secondary investors willing to buy risky loans from banks. “Over time, those markets will come back to life,” says Bankrate.com’s Greg McBride, “but bad memories won’t fade fast.”

The lesson? Don’t let good credit habits slide, even if you’re not planning to borrow right away. In fact, it never hurts to set up automatic bill payments so you are never late addressing your obligations.

Again, independent fee-only financial planners specialize in these areas. Contact a fee-only financial advisor today for help setting up a debt management program, and more tips for establishing a strong credit report.