7 tips for surviving the credit crunch

1. Verify the status quo"Step one is to make sure that you do, in fact, still have the same terms that you had originally," says Ulzheimer. Check not only the interest rate on your account, he says, but the credit limit and the grace period. Issuers sometimes shorten grace periods on accounts that aren't generating much revenue.


2. Avoid 'atypical' activity Consumers spend in patterns, so any atypical moves could cause a drop in your credit score and attract scrutiny from your issuer, Ulzheimer cautions. "You don't want to all of a sudden start revolving a balance just for the heck of it because you want to put more money toward your 401(k) or put more money toward other investments or stick more money in savings. If you have the ability to continue to pay in full, it's probably a good idea to continue to do so."
Ditto multiple balance transfers and credit application sprees. Like someone passing a police car, you don't want to do anything that looks suspicious.


3. Keep up the good payment history Always pay on time, keep balances low and pay them off every month, if possible. The higher your balances, the riskier you look.



4. Don't neglect other bills Utility companies and other service providers sometimes report payment information to the credit-reporting companies, says Steven Katz, director of consumer communications for TransUnion's TrueCredit.com. An unpaid medical bill, for example, could wind up as a derogatory item on your credit report, bringing down your credit score.


5. Check your credit reports Make sure your credit reports contain accurate information, because inaccurate, derogatory marks could damage your credit scores. Pull a different report every four months from one of the three major credit-reporting agencies by going to http://www.bankrate.com/msn/news/cc/www.annualcreditreport.com. You're entitled to a free credit report from each bureau every 12 months.


6. Plan ahead if missing a payment If you know you're going to miss a payment, don't wait for a collector to call about the delinquent debt. Contact your issuer in advance to see if you can work out a payment plan.
Hardekopf advises calling your issuer to explain why you're going to miss a payment. Emphasize your good payment history and say that while you don't want to see your interest rate skyrocket, you aren't trying to skip out on the bill. Ask if a payment plan could be arranged.


7. Read 'junk mail' from your issuers People who don't open correspondence from their issuers may get rude surprises. According to the Truth in Lending Act, an issuer has to give only 15 days' advance written notice before taking an adverse action -- an undesirable change to the terms of your card agreement.

**Information provided courtesy of Bankrate.com