Buy Second Hand Items To conserve your cash, and prepare for the tough times ahead, buy good-quality second-hand items, instead of splurging on high-priced items, which are sure to keep you sinking in a sea of debt. To stay afloat during tough financial times, keep your sights focused on reducing, as well as eliminating, your debt. Insurance premiums for people who've experienced bankruptcy are also more costly than for people who have stable financial records. A person who's experienced bankruptcy will also be classified as a high-risk customer, hence the rejection of his or her loan application. Before you file for bankruptcy, remember that bankruptcy is not an easy way out of your financial mess, because it will have serious implications on your credit record, and will also seriously hamper your business dealings with other people. 3 Closing Old Accounts Helps Boost Your Credit Report This myth s nothing but a common delusion. The truth is that closing old accounts won t affect your credit score, but opening these old accounts will surely hurt your score. Having to many accounts also does damage to your credit score, because your score is usually affected by the difference between the available credit and the credit that s being used. The FCRA therefore, enables you to directly contact these credit reporting agencies, and formally relay your disputes or complaints. Make Sure Each Report Is Not Past The 7-Year Limit Once you get a copy of your credit report from the major credit agencies, compare each of the reports, and ensure that these are not past the seven year limit for reporting of any errors or negative information. 5 Major Threats To One's Credit Score A person s credit score is an extremely important tool, especially if the individual wishes to apply for a loan, or wants to get insurance. Maintaining a good credit score is crucial for maintaining a sound financial picture, since this allows the person to apply for loans without encountering too much hassle. - Credit monitoring services quickly notify you of any activity in your account. You ll also be able to immediately notice if ever there are any inconsistencies, inaccuracies or flaws within your report. By immediately finding out any numerical or typographical errors, this allows you to quickly file disputes to correct any inaccuracies.