Government Regulations May Keep Consumers Better Informed

Government Regulations May Keep Consumers Better Informed

Having a problem on your credit report can have devastating consequences. For example, if your credit report has a mistake on it that makes you appear to be irresponsible with your finances, you may not get approved for a home loan. If you are approved, you may have to pay a higher interest rate than you should have to pay. In some states, insurance companies also look at credit reports in order to determine the rates they will charge their customers. This means that one simply mistake could potentially cost you hundreds or even thousands of dollars each year.

Luckily, if the Federal Reserve and the Federal Trade Commission get their way, you might not have to worry about this any longer.

Keeping Consumers Informed

Back in 2003, Congress directed these two federal agencies to create a system that would help protect consumers from being negatively affected by erroneous information on their credit reports. More specifically, Congress wanted lenders to be required to notify consumers about the information they found on the credit report that caused them to turn down their loan applications or that caused them to get a higher interest rate.

Although it took a few years to complete, the two agencies have finally published their proposal for accomplishing this task. In fact, the proposal was published in the middle of May and is now open to three months of public comment. If all goes well, the plan may be implemented later this year.

How it Works

Through the proposed system, the process of notifying consumers about credit issues would actually be quite simple. Basically, if a lending institution pulls your information and finds that you do not qualify for its best rate, the loan officer would have to provide you with notification in one of two primary ways. These include:

• Providing you with your credit score as well as a graph showing how your score compares to other applicants as well as the factors that caused your score to be lower. The written notice would also need to provide you with information for contacting your credit bureau in order to obtain a full report.
• Providing you with a tiered pricing grid, which only has to be sent to those applicants that have a score in the lowest tiers.

While this legislation will help consumers become more aware of their possible credit problems, there are still many that are likely to slip through the cracks. For example, lenders would only be required to send notifications to those that have a score that is significantly different from the majority of applicants. Therefore, individuals applying for a mortgage loan that specializes in providing loans to people with poor credit may not qualify for notification because the majority of applicants also have poor credit. Despite its little pitfalls, however, it is definitely a step in the right direction toward keeping consumers better protected and informed.


About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Reasons to Use a Business Credit Card

Are you a small business owner? If so, you might want to consider applying for a business credit card. Although the interest rates on credit cards can be quite high, if you use your card responsibly and if you pay it off at the end of each billing cycle, having a credit card can be a real asset to your business. Or, if you do need to carry a balance for a period of time, you can take advantage of great introductory offers that will actually provide you with a rate that is lower than a conventional bank loan.

Obtaining Start Up Money for Your Business

Applying for a new credit card in your business’ name can be a great way to help you get the start up money you need in order to get your business off the ground. Rather than go through the trouble of applying for a conventional loan, you can use your credit card to make the purchases you need to get your business started. With many credit cards offering 0% APRs for the first twelve months of membership, you may be able to get your business started and get the card paid off before the interest rates kick in. Of course, if you don’t get the card paid off, you may face a high interest rate. So, make a solid business plan before you start making purchases.

Enjoying the Convenience of a Credit Card

There is no doubt that using a credit card to make your business purchases is very convenient. Most merchants and service providers accept credit cards for payment, which is far easier than carrying around a checkbook or cash. In addition, when you keep your expenditures on your credit card, it is easy to keep track of what you spend each month. In fact, if you choose to get credit cards for your employees, a business credit card will even break down your statement for each employee. That way, you can see precisely what your employees are spending. In most cases, you can even individualize the credit limits for each employee so you can be certain no one’s spending gets out of control.

Getting Credit Card Rewards

There are many potential financial rewards associated with using a business credit card. First, if you use a rewards credit card, you will earn points or cash back for the purchases you make. If you pay off your balance at the end of each month and you have a rewards credit card, you can actually make money with your credit card rather than lose it. In addition, many business credit cards offer discounts with merchants that business owners typically use, such as with stores that sell office supplies. Finally, the fact that your business name and logo can be put on your credit card has the reward of personal satisfaction – and may actually help you find new customers when you pull out the card and the cashier sees your logo on the side.


About the Author:
Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Thinking About Transferring a Balance? Know What You are Getting Into Before You Complete the Transaction

When you receive an application from a credit card company in the mail, it may include an invitation to transfer your credit card balances to the new credit card. Or, you may even receive periodic invitations from your current credit card to complete a transfer at a low interest rate. You may be tempted to complete one of these transfers, and it is possible that performing a balance transfer is a good decision, but you need to know exactly what you are getting yourself into before you go ahead with the transaction.

Pay Attention to the Fees

While the credit card may be offering a balance transfer rate that is much lower than the interest rate you are currently paying, there may be a number of fees associated with the transfer as well. Generally, these fees are determined by calculating a percentage of the amount you are transferring and, while there may be a cap on how much you can be charged for a balance transfer, you can still end up paying over $100 to transfer your credit card balances. When all is said and done, the money you save on interest may be less than the money you are paying toward fees. Therefore, before you complete a balance transfer, be certain to find out about the fees that you will have to pay for the transaction.

Consider the APR

When you receive that enticing offer from the credit card company, the interest rate will likely be quite low. As a result, it will seem like a great idea to transfer your balances. Don’t just look at the introductory rate, however, as the ultimate rate of the credit card may be much higher than what you are currently paying. For example, you may receive a card with an introductory rate of 0% on balance transfers, but it reverts back to the standard 19.99% interest rate after the introductory period is over. Some cards will keep the low interest rate in place until the balance is paid off, but this is not always the case. Therefore, either make certain you pay the card off within that introductory period or don’t bother to make the transfer. Otherwise, you will likely spend more in finance charges if the ultimate APR is higher than what you are currently paying.

Find a Great Deal and Make a Plan

Some people try to evade their credit cards by jumping from one card to the next. Bouncing from one card to the next in an effort to keep your finance charges down will not pay off in the long run. Sure, it will help keep your finance charges, but the only way to take care of the problem is to work out a plan that allows you to get the debt paid down. So, rather than trying to work out a plan for transferring your balances over and over again, work on creating a plan that will allow you to get the debt paid off completely.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.reliacredit.com/ . For more info and to order your credit report with FREE credit score please visit http://www.reliacredit.com/

Selecting the Right Credit Card For You

If you are like most people, your mailbox is overflowing each week with credit card applications. It is no secret that credit card companies are actively seeking new credit cardholder and, as a result, many are offering some pretty good deals to those looking for a new credit card. Nonetheless, that doesn’t mean all of the credit card offers are best for you. Therefore, you need to take a few things under consideration in order to make certain the credit card you apply for is the right one for you.

Take a Look at Your Financial Situation

Your current financial situation is one factor you should consider when trying to decide on the right credit card. If you have a tendency to carry a balance from month to month, for example, you should look for a credit card with a low interest rate. This way, you will pay as little as possible in finance charges each month.

Choose the Right Rewards Card

If you do pay your credit card in full each month, you should apply for a rewards credit card. With a rewards credit card, you will be able to earn points or other benefits every time you make a purchase with your card. These credit cards tend to have a higher interest rate when compared to non-reward credit cards, but that won’t be an issue if you continue to pay the credit card in full each month.

Of course, you also need to consider the type of rewards credit card you should apply for. By considering your lifestyle and examining your spending habits, you can choose the credit card that will provide you with the most rewards possible. If you tend to spend a lot of money at restaurants, for example, you should choose a rewards credit card that provides you with a greater return on these purchases and rewards you with gift certificates to your favorite restaurants.

Help Build Your Credit

If you have poor credit, you might want to consider applying for a pre-paid credit card. With a pre-paid credit card, you send money to the card ahead of time and the amount of money you send to the card becomes your available spending limit. These cards often have fees associated with them, however, so be certain to shop around in order to find the one with the lowest fees. In addition, make certain the card reports cardholder activity to at least one of the three major credit reporting bureaus. Otherwise, using the card won’t help you rebuild your credit. If the card activity is reported, on the other hand, responsible use of the card can help you rebuild your credit rather quickly.

Although many credit card offers may contain attractive introductory offers, you should take time to consider your options before you actually complete an application. In this way, you can find the credit card that is best suited to your lifestyle and that will help you keep your finances properly under control.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Tips for Avoiding Filing for Bankruptcy

Are you struggling to pay your bills on time? Are you feeling overwhelmed by the debt? Do you feel as if your only choice is to file for bankruptcy? If so, you might want to take a few steps in order to avoid having to actually file. Filing for bankruptcy is a serious issue that will haunt you for years to come. Therefore, you should do as much as you possibly can before you take such an extreme measure.

Contact Your Creditors

One of the most important steps you can take is to contact your creditors directly. Many people facing financial problems choose to ignore the phone calls and to throw away the reminder notices sent by their creditors. Pretending you aren’t in debt won’t help you with the situation. Rather, you need to take a proactive approach. Don’t wait for your creditors to contact you. Instead, call them and try to work out some sort of payment plan. Most creditors will work with their clients if they explain their situation and present a repayment plan to them. Not only will this make your bills more manageable, it will also help prevent you from having to file for bankruptcy in order to get out from under your debt.

Consolidate Your Debt

In many cases, you can make it easier to repay your debt I you consolidate the debt you currently have. Consolidation can help you reduce the amount you have to pay each month and you can potentially get a lower interest rate than what you are currently paying on your debt. In order to get the best interest rate, however, you should look into consolidating your debt before you have started to fall behind on your bill payments. This way, you will still have a good credit rating and you will qualify for a better interest rate.

Talk to a Credit Counselor

If you are struggling with making arrangements with your creditors or if you are unable to consolidate your debt, you might want to consider obtaining the services o a credit counselor. A credit counselor can help you take a closer look at your current financial situation and find ways for you to overcome your debt. In addition, a credit counselor may be able to work with your creditors and find ways to reduce your interest rate or your payment amounts. This way, you will be able to get your finances back on track.

Filing bankruptcy is a decision that can cause you problems for years to come. It can make it difficult or even impossible to obtain a loan or a credit card. In addition, it can cost you hundreds or even thousands of dollars in extra finance charges because of the higher interest rates you will pay when you do get a loan. Follow these simple steps and prevent bankruptcy from happening to you.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Tips for Increasing Your Credit Score

Are you planning to apply for a loan or new credit card any time soon? If so, you might want to check out your current credit rating before you complete that application. After all, if your credit rating is poor, you may find yourself spending a huge amount of money on finance charges and interest payments. In order to avoid tossing your money away because of a low credit score, you should put off the loan for a little longer and build up your credit score. By following these simple tips, you can build up your credit score faster than you may have thought possible.

Tip #1: Pay Your Bills on Time

The single most important thing you can do in order to increase your credit score is to simply pay your bills on time. Just one late payment can truly wreak havoc on your credit score. Even unusual bills, such as late fees to your library for books you returned late, need to paid. Otherwise, your failure to pay may be reported to the credit reporting bureaus and your credit score will be negatively impacted.

Tip #2: Check Your Credit Report

The federal government has determined that everyone is entitled to receive free copies of their credit reports. You can order yours by going to AnnualCreditReport.com. After you receive your free credit report, look it over for errors. Even a seemingly small error, such as showing a lower credit limit than you really have on your credit score, can have a negative impact on your credit score. Be certain to report any errors you find to the credit reporting agency as soon as possible. That way, the bureau can look into the error and make any necessary changes.

Tip #3: Pay Down Your Credit Cards

Your credit score is partially determined by your debt to credit limit ration. The more debt you have as compared to your available credit, the greater risk you become. For example, if you have a credit card with a $2,000 limit and you are carrying a debt of $1,800, this will actually hurt your credit score more than if you had a credit limit of $6,000 and you were carrying the same balance. Similarly, it is usually better to have $1,000 of debt spread over two credit cards than to have $1,000 in debt on one credit card.

Tip #4: Don’t Cancel Credit Cards

Although we all know that having too many credit cards in your wallet can be financially dangerous, it is a bad idea to cancel the credit cards that you already have. When you cancel your credit card, you lose all of the credit history you have acquired through the card. As a result, your credit rating will take a downward spiral.

Tip #5: Don’t Open New Credit Card Accounts

It is important to resist the temptation to open up several new credit card accounts. The more your credit report is accessed by lending institutions, the more your credit score is damaged. It is easy to get caught up in the thrill of applying for department store credit cards – particularly since they often provide very attractive benefits to new applicants – but the inquiries into your report makes it look as if you are trying to gather as much credit as possible. This makes you an increased credit risk to potential lenders. Therefore, you should hold off on these applications until after you have received the loan you are really wanting to acquire.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Tips for Getting the Most from Your Rewards Credit Card

Are you thinking about getting a reward credit card? If so, you are not alone. A growing number of people are deciding to take advantage of the perks that rewards cards provide. When used properly, rewards credit cards can put some extra money in your pocket. Unfortunately, many people don’t know how to take full advantage of their rewards credit cards and are actually losing more money in the process. By following these few simple tips, however, you can manage to get the credit card companies to pay you for using their card.

Tip #1: Pay the Balance in Full Each Month

This first tip is probably the most difficult one for many people to follow. A number of people have grown to depend upon their credit cards and are accustomed to carrying a balance from month to month. If your current financial situation has you in a crunch and you have to carry a balance, don’t carry one on your reward credit card.

Reward credit cards generally have a higher interest rate than credit cards without any frills. Although you may be getting a 1% cash back rebate with the purchases you make with your credit card, you may be paying 5-10% more in interest. As a result, you will actually be losing more than you gain when you use your reward credit card. If you can’t pay off all of your expenditures each month, you should only charge what you can afford to pay on your rewards credit card and place the remaining charges on a credit card with a lower interest rate.

Tip #2: Know How to Make the Most Money with Your Card

If you have more than one reward credit card, make certain you know how you can earn the most money with each one. For example, some reward credit cards pay a higher percentage of return on gasoline purchases while others pay more when you purchase groceries or travel-related items. Know the specialty area of your credit card so you use the one that will pay you the most when you make your purchases.

Tip #3: Take Advantage of Special Program Offers

Some reward credit cards specialize in offering “no hassles,” but most of these types of cards do require paying special attention to specific guidelines. For example, you might have to sign up in order to participate in some cash back programs. With some cards, you might have to sign up every three months in order to be eligible for a higher percentage rebate. If you don’t sign up, you may still receive a smaller cash back award but you won’t get as much from your credit card as you could be getting.

Tip #4: Spend Your Points Wisely

Depending upon the reward credit card, you may have the option to spend your points in a variety of different ways. For example, you might be able to get cash back with your credit card points or you might be able to trade in your points for gift certificates or other types of rewards. When you trade in the points for something other than cash, you often get a greater value for your points. For example, 1000 points may be enough to help you earn $10 but those same points may be traded in for a $20 gift certificate to a restaurant. If you enjoy eating at one of the available restaurants, trading in your points for a gift certificate will help you stretch your points further.

Tip #5: Pay Your Monthly Bills with Your Credit Card

Look over your monthly bills and see if you have the option to pay them with your credit card. By paying your regular monthly bills, such as your utilities, cable or satellite and telephone, you can make some extra cash with your reward credit card. Since you already have planned a budget that will allow you to pay these bills, you should have no problem paying off the balance at the end of each month. Paying off your utilities with your reward credit card is almost like getting free cash!

For more info and to order your credit report with FREE credit score please visit http://www.reliacredit.com/

How much does your credit score drop when a foreclosure is added?

Information about the specifics of credit scoring is largely emphirical and based on trial and error. The Fair-Isaac company, who pioneered credit scoring, is very secretive about the exact working of their software.

In addition, credit scores compute ALL the information showing in your credit report each time it is calculated. Changes in your debt to available credit, other derogatory information (like late payments and collection accounts) and when these things occured are taken into account.

History, specifically what has taken place in the last twelve months, is factored a full 35%. So if the foreclosure was within that time period and was removed, your score would recover a significant amount of points. If the foreclosure was older, it would not impact your credit score nearly as much.

For more info and to order your credit report with FREE credit score please visit http://www.reliacredit.com/

Choosing a Credit Card

Shopping around for a credit card can save you money on interest and fees. You’ll want to find one with features that match your needs.

This information can help you

• Understand the features of credit cards
• Compare credit card features and costs
• Know your rights when using your credit card
• File a complaint if you have a problem with your credit card

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Why pay for credit repair services when you can do it for FREE?!?

When it comes to repairing your credit, you're the best person for the job.

Credit repair scam artists will charge you anywhere from $500 to $1,500 or more upfront, and promise you everything from a new Social Security card to perfect credit.

But these companies can't do anything for you that you can't do for yourself -- for free -- and they might ultimately do more harm than good.

What should you do if you have bad credit? Here are 10 tips that are designed to improve your credit history and raise your credit score:

1. Pull a copy of your credit history. Each credit-reporting bureau is required to give you one copy once a year. You should pull copies from each of the bureaus, since they sometimes collect different data.

2. While you're there, buy a copy of your credit score from Equifax.com. Equifax offers a FICO score, also known as a Beacon score, which is from Fair Isaac, the company that created the concept of credit scoring. Most creditors will pull a FICO score, so you should see what they're seeing. Your credit score will give you a snapshot of what your credit information means to your creditors. The FICO score runs from 350 to 850. The higher the number, the better. Your target should be to have a credit score of at least 720.

3. Check your credit history thoroughly. You're looking for errors, misinformation and negative information that might count against you. File a dispute with the three credit-reporting bureaus if you spot any errors. Some credit reports have serious errors in them, so fixing these will boost your score.

4. Understand what kind of debt you're facing. Make a list of everything you owe, the interest rate each debt carries, and the minimum payment due each month. Then, prioritize your debt: mortgage, real estate taxes, credit cards and medical bills should be paid in that order.

5. Negotiate with your creditors for a lower interest rate. Paying less in interest means more of your payment each month goes toward paying down your balance. If you have a good credit score (over 720 is a starting point), you should be able to find other credit cards featuring zero percent to 5 percent in interest for the first year, or for the life of a balance transfer (check out sites like CardRatings.com and CardTrak.com to compare credit-card offers.) Just be sure you read the fine print: Some credit cards require you to charge on the new account each month or face a stiff fee.

6. Pay down the debt with the highest interest rate first. Pay your mortgage and home equity loan and lines of credit in full each month. Then, make sure you have enough cash to make all of the minimum payments due on your debt each month. Then, throw any spare cash at the debt that carries the highest interest rate first. Once you've paid down that debt, transfer all of the extra cash you're paying each month to the debt with the next-highest interest rate, and so on.

7. Pay everything on time, even if you can make only the minimum payment. The most crucial component of your credit history and credit score is your ability to pay your bills on time each month. Paying on time shows your creditors that you take your debts and obligations seriously. Even one late payment can seriously damage your credit history and credit score, even though it can take a year's worth of on-time payments to start to heal your credit history and raise your credit score. It doesn't seem fair, but that's how the credit industry works.

8. Don't charge more than 25 percent of your maximum available credit limit. If you carry a credit-card balance that is a higher percentage of your available credit limit, your credit score will go down. Why? Because creditors believe if you charge the maximum on your credit cards, it means you can't properly manage your credit. You're better off spreading out your debt between three or four different cards than having it all piled on one card.

9. Don't open and close a lot of accounts. Again, a credit score tells current and future creditors how likely it is that you won't pay back your debts. It assesses how risky a borrower you are today. Every time you apply for a new credit card, that creditor pulls a copy of your credit history from the credit-reporting bureaus. That "inquiry" gets reported on your credit history. Too many inquiries in a short period of time signals that you may be getting low on your available credit and need more cash. Even though you might be interested in getting 10 percent off your first purchase for opening a new account, it looks different to a prospective creditor.

10. Don't share credit (except with a spouse). It's easy to tell someone that you'll "co-sign" a credit card, student loan or a mortgage loan application, especially if it's someone you've known for a long time. But it's also easy to wind up in a situation where that friend or relative stops paying his or her bills (for whatever reason) and your credit will take a big hit. Once you're a co-signer for a loan, you're legally obligated to make those payments -- whether or not you can afford them. So think carefully before you agree to co-sign a loan, and nip the problem of bad credit before it begins.

Article source - Inman News http://www.inman.com/hstory.aspx?ID=65868

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com