The importance of knowing what is a good credit score has become a much more visible topic of discussion since the subprime mortgage mess started this summer. As background information, subprime loans are the loans given to borrowers who credit bureaus consider to have relatively poor credit histories.

Despite the fact that most subprime mortgage loans were only offered by lenders to those who would be able repay them, the previously inconsequential subprime sector of the $10-trillion U.S. mortgage market was able to significantly disrupt the global credit markets, causing a quite dramatic 10% downturn in the domestic stock market with real, substantial losses and repercussions.

Within days potential loan applicants, with less than perfect financial histories, found that suddenly there was no money available. This was caused when many subprime lenders were forced to lay-off employees and close up shop. Those looking to take out loans for homes, cars, or other expensive items found that when they checked their online credit scores they were no longer eligible for loans that they would have been approved for just days earlier.

Credit bureaus have been flooded with requests for credit reports and help improving them. The positive development from the subprime loan debacle is that people are beginning to pay more attention to the repercussions of their financial histories, and credit bureaus are making this information more available.

Most loans, however, were only offered to those who could afford to pay them back, so it is troubling how the obscure subprime section of the $10-trillion U.S. mortgage market could have caused such worldwide havoc in the credit markets. But, it did, and along with a very sharp 10% correction in the domestic stock market, the pain this development caused was real and so were the losses.

The fallout of the subprime loan collapse is expected to last for at least two years, according to most financial experts estimations. The Federal Reserve bank has, however, recently made adjustments to the interest rate at which it loans money to banks, which should help the economy curb the impact of the subprime loan disaster and the turmoil it caused in the credit markets. Experts are also predicting that the Fed will cut interest rates in order to encourage consumer spending and to make loans more inviting for qualified borrowers.

- Daniel Lesser