Is the recession good for your credit?

Many people are wondering if the recession is something that is actually good for them or not. While many people have lost their jobs, there are also many people who have learned to cut back on their consumption, to put their credit cards away and to think before they get themselves into debt. So, can the recession be good for your credit and your debt?

Naturally if you go through foreclosure or bankruptcy, it is not good for your credit score but it can be good for you because it teaches you that you don’t need to live with credit, that you can get by without it. It is a fresh start that allows you to begin building your credit back up and clearing away the debt that you were saddled with before.

In a recession, you are going to be saving your money and by saving your money you save on accumulating debt. Instead of walking into a store with a credit card like you may have done in years past, you are walking into a store with your credit card thinking about the payments you will have to make, about how much this is going to cost you in the long run and whether or not you really want to buy that item that you may not even really need.

During recession, you should take a look at your finances and your expenses and determine where exactly you can begin to cut back. For example, if you find that you eat out a lot, and that it is costing you $200 a month, then maybe you should cut back on eating out and instead choose to make your own dinners at home which can be much healthier and much cheaper as well. These are the kinds of decisions that you are going to have to make during the recession if you want to save money, eliminate debt and improve credit.

You should not think of the recession as a hard time for all because it can be a wake up call instead of a death bell. You are learning that you can save money, not spend money on things you don’t need and even lower your debt by practicing the following rules:

1. Think before you spend.

2. Don’t use your credit card.

3. Cut back on expenses to save money and eliminate debt.

By doing these things, you will greatly alter your life. If you were close to being overrun with debt before the recession hit, then this is the perfect time to get everything in order and to take a hard look at your spending habits. By cutting back in a recession, you will find it much easier to take those same ideas and philosophies into boom times. Then, when another recession hits you will be ready for it and you won’t have very much debt because you learned from the previous recession. Recessions can be good, all you have to do is look for the silver lining in the dark cloud.

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