Time and again the environment on the planet earth underwent upheavals the scientists called the ‘bottlenecks’ to attain a sustainable and highly evolved ecosystem  There were natural disasters that jolted societies and communities from their complacence to eliminate the fragile and the weak for the fittest to survive and multiply.
 
Recession is the modern day economic bottleneck for eliminating loopholes in the economic system, to replace them with a robust one in a country. Recession can be precipitated by the economic loop holes like the ill managed sub-prime mortgage activities or mismanaged industries in a country. Loan recoveries come to a grinding halt. Jobs are lost. Old age funds are misappropriated. Buying power goes down. Rate of unemployment goes up. This reflects a total financial disaster. The bright side of the story is this trend does not stay forever. Economy will assume its former glory sooner or later.

This all had happened before. Self-correcting market forces intervened with the recession since World War II that lasted for one year. The present recession has now extended to August making it 20 months old apparently because of last fall’s severe financial crisis. The drastic fiscal policies with the trillion-dollar deficit do slow, if not halt the cycle.

The economy in recession corrects and resets itself in a reasonable period depending on its severity as seen during the last two weeks:

• U.S. economy lost 247,000 jobs and now the unemployment rate dropped unexpectedly from 9.5%. to 9.4%
• This unexpected jobs report gave investors hope
• On Friday stocks started showing promise of growth
• AIG recorded its first profit since 2007 with profits of $1.82 billion and shares jump 10% in early trading
• The Royal Bank of Scotland (RBS) after posting a half-year loss of $1.7 billion showing a surge towards real recovery by 2011
• The "Cash for Clunkers" program is getting another $2 billion infusion
• The first $1 billion effort helped improve domestic vehicle sales in July
• Ford Motor posted its first year-over-year sales increase since 2007, thanks in part to the $4,500 incentive provided by the program
• Ford and General Motors will have better sales considering production increases

This is the light we see at the end of the tunnel because of these corrective price changes in markets, as a strategy for coping with recession, banks and lending institutions started reliving the nascent period of conservative banking and lending practices. This atavism or the throw back churn up the fittest policy for better survival.

Some of the highly viable conservative banking and lending practices that make individuals and the state recession proof:

• Down payment: A down payment .levels out the difference in interest rate that is otherwise very high
• Credit standing with long term source of income: Access to loan is limited if you can’t show credit standing with long term source of income

One may wonder that these pre-modern lending practices were well suited to an economic environment with stable jobs four decades back. Amazingly, they can even be practiced now. The magic word is adaptation. If you are planning to apply for a mortgage or a loan with a long term repayment it calls for modifying your own financial environment first. You may or may not borrow; you will get into healthy financial habits in the long run.

• Improve Your Credit Rating: Improve your credit rating quickly so that you can adapt to the quick changes in banking practices with a FICO greater than 650
• The down payment requirement: Save at least 10% of your monthly income so that you do not have to look for funds elsewhere required for down payment. It should also inculcate a good habit o saving for rainy days
• Steady Job vouches for your current financial status: A steady job along with your good credit rating improves your chances with the lending officer from the bank

To evaluate your applications for Loans, Mortgage, credit, insurance, employment, and renting a home, you should be sure the information is accurate and up-to-date in your credit report.  Repair your credit report to correct errors and update it to get better FICO ranking.