This article is the archived version of a report that appeared in July 2009 Consumer Reports magazine.
Sure, the economy seems to be improving. Consumer confidence reversed course and started ticking up this spring. Even the stock market has gained back some ground.
But it's too early to breathe a sigh of relief. The recession's effects will linger as consumers continue to get squeezed in a credit crunch more severe than we've seen in years. Even folks with good histories are finding their credit limits lowered and interest rates hiked.
Hard-to-get, costly credit is more than just inconvenient. Such restrictions might prevent many consumers from buying homes or big-ticket items like cars, and they can be a barrier to getting cheap insurance rates.
"We are returning to the days when credit is extended only to those who are truly creditworthy," says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling, a nonprofit network. "In the long run it's going to be good for consumers."
But that offers little solace if you're trying to navigate the new credit landscape now. Every consumer needs to perform an emergency credit checkup and get to work reducing debt, saving more, and improving creditworthiness.
Are you in shape? Here's what to do: