With banks tightening their grip on loans, getting one is requiring more work and vigilance on the borrower's part. Even people with excellent credit are jumping through hoops to verify everything and avoiding nicks that could give the appearance of being a risky borrower. There are a few strategies to employ that could improve the chances of not only getting a loan but getting a better rate.

One of the obvious ones, beyond paying bills on time, is to not be overextended on credit. Lenders look at how credit is managed, so someone with $10,000 credit limit but owes $9,000 won't appear as good a borrower as someone who owes only $1,000 of the $10,000 limit. Therefore, it is important to pay down credit before applying for a loan. This can help raise your credit score and get a better rate.

When you do pay down the debt, such as on a credit card, keep the account open to show lenders you have a long credit history and you are responsible by not maxing out every loan you get. Be wary, however, of some creditors who have started reducing credit limits as amounts are paid off. You may need to ask for the limit to be raised, or switch to a new credit card.

Next, verify your credit score every year, or right before you apply for a large loan such as a mortgage, to make sure there is nothing on the report that is inaccurate. While other credit report requests could harm your score, because it indicates you are looking for help often, requesting your own report does no damage to your record. There are three credit bureaus that maintain reports. Request them all through www.annualcreditreport.com. Reports are free once a year. Nearly eight in 10 reports have an error, according to the U.S. Public Interest Research Groups. Be wary of firms that offer free credit reports only after you sign up for another service with a monthly fee.

If you do see a mistake, follow the instructions to dispute the charge. If the mistake was caused by a certain circumstance you feel was not common, also dispute it.

The importance of good credit in our changing economy cannot be overemphasized. Those neglecting their credit are positioning themselves to be shut out of the economy, and at risk of not having a lifeline when times are tough. In addition, those with poor credit also face higher expenses as interest rates, insurance premiums, and rental rates can be higher for those without excellent credit, not to mention employers may shun applicants that do not demonstrate responsible money management.

Make it a point to audit your credit at least once a year and make managing it a priority in your life. Doing so will eliminate chances of financial disasters.