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Will “trade wars” really mean anything to me and my borrowing power?

Will “trade wars” really mean anything to me and my borrowing power?

The global economy seems to be growing more volatile, and news anchors are mentioning the word’s “trade wars” in what seems like every financial update. In an unsettled economy such as this one, lenders naturally become more conservative in order to avoid losing money on clients who will default on their loans.

Credit, therefore, becomes reserved for those lucky folks who are considered a lower risk – those with higher credit scores. Savvy borrowers know that they must improve their credit scores now, before the economy becomes more unstable, in order to protect against the potential impact that further volatility and an uncertain climate may have on the credit marketplace.

It’s going to be a bumpy ride

MarketWatch reported on March 2, 2018 that “the threat of a trade war adds another layer of uncertainty to existing concerns about inflation and the prospects for long-term growth.” Those of us who are not economists have to remember that even positive change is considered volatility in the eyes of economists; counterintuitively, when the economy is growing rapidly, those who oversee the nation’s numbers have an innate concern that out-of-hand expansion will result in a loss of control. They’re a tricky bunch, economists, so it’s easy to see why they’re skittish when issues like two global superpowers squaring off over major commodities come into play.

Consider, then, the fact that most experts say we should expect volatility along these lines, with spikes of additionally volatile periods, to become the norm in our economy for the time being. These are really interesting times to be an economist. And that’s not something that lenders like to hear.

Global action, local impact

Obviously, it’s easy to sit back and watch the news thinking, “What does all of this have to do with me?” Hard as it may be to believe, when the president of China hands down an edict on aluminum tariffs, it really does have an impact on the rate you pay when you take out an auto or home loan.

And the current credit outlook is affected by far more than just trade. Again, there are many positive factors to consider – tax cuts, economic growth, job gains and a rising stock market – as well as potentially adverse issues like those involving trade, the record deficit, and the potential for inflation. In fact, as USA Today reported on March 21, 2018, the Federal Reserve elected to raise interest rates after taking all of these factors under advisement, a prime example of the effects of both positive and negative volatility. For those of us who might need a little extra cash, this move tacked additional dollars onto our repayment plans – even more so for anyone with a sub-prime credit score.  Thought in 2019 the Fed cut interest rates which has a positive net effect on the economy.

The news only gets more worrisome – or expensive, as the case may be – the more hits your credit report has taken. Credit can be extremely hard to come by and even freeze for all but the most highly qualified borrowers during volatile periods, says financial publisher Investor Junkie. The time for attention to improving your credit score is sooner rather than later.

Be proactive

Economists and lenders are not the only ones who get concerned about a volatile marketplace: We all get worried when we are not sure what the coming months will bring. But as US News and World Report advises, there are many things that can be done to improve your borrowing leverage. As all legitimate credit repair agencies will tell you, it is possible to improve your credit score yourself. You’ll need to pursue a combination of the following tactics:

  • Perform a thorough review of your credit report.
  • Ensure that you consistently pay your bills on time.
  • Pay off or pay down your loan balances.
  • Borrow more and then pay it off on time to build your credit.

During this process, you really have to mind your Ps and Qs: You must be careful about how frequently you file disputes with the credit bureau, because filing too many or filing them too close together can get you in trouble. All in all, going through the process yourself is time-consuming and a drag on your patience, with no guarantees for success.

BoostMyScore, meanwhile, presents an alternative: A simpler way to improve your credit score and see a benefit with potentially risk-averse lenders in a turbulent marketplace. The company’s unique system has enabled it to help thousands of consumers from across the country excel in financial markets of all types, so today’s landscape is no challenge. BoostMyScore is focused on helping people quickly and easily boost credit scores using seasoned credit tradelines, a tactic that vastly simplifies the process. Contact the company today and find out how you can effectively invest in “borrowing insurance” against getting shut down for a loan in today’s volatile economy.

Bill Airy

About the Author:

Bill Airy is the CEO and Founder of BoostMyScore. For over 12 years he has helped American consumers get a second chance at a better financial life by helping them to improve their credit score. He regularly publishes helpful content on this Blog to educate others about Credit Scores and best practices when trying to improve them.

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