A few years ago if you referenced the term "credit crunch", most people would be puzzled. Today barely a single day can pass without the phrase seeing consistent if not constant use in the newspapers and on television. The credit crunch is a crisis that is affecting numerous financial institutions and banks, and has been wrecking havoc on the economy since the summer of 2007. This is when it had officially become apparent that millions of mortgage borrowers in the United States were not going to be able to pay their loans back.

For a number of years banks were offering mortgages to people even when they did not have the credit to support them. These loans were offered at low rates, but only initially, and when the rates went up over time, borrowers were no longer able to pay the mortgages back, which meant that banks were becoming less willing to lend money, clamping down on the newer, fresher loans to other customers, only offering higher interest options to customer needing loans.

All of the world's money markets have been affected by these financial issues, including markets in the United Kingdom and elsewhere. Regardless which bank or building society you turn to, credit is much harder now to attempt to obtain than ever before, and also much more expensive, and this goes for personal loans, mortgage loans, credit cards and even overdraft fees. Here is what you need to understand in order to stay calm and avoid becoming affected by the credit crunch. If you want to resist panic by surviving the credit crunch, consider these things:

- The credit crunch is absolutely not going to affect everyone equally.

If your credit is good or even just reasonable, then it should not be difficult for you to find a mortgage or another loan or line of credit that you need, even if you have to pay more now than if you had applied a year or two ago.

- Many banks are now cutting their base rates in half.

They are pumping money into other investment options to make it easier for responsible borrowers to get the money they need, which is going to bring down the cost of credit over the span of the next year or so.

- While some lending options are going to be a bit harder or more expensive to get, such as automobile loans and mortgage loans, you can get money when you absolutely need to.

So if you need a student loan, for example, rest assured that there are still options out there because the government is working to provide lending options that are most easily obtainable for those who are in need.

- Check and protect your credit score and record, fixing any mistakes that may come up.

This will work wonders for keeping your lending options open when you need them, which is the best way to make sure that you can get a loan when you absolutely need to.

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