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

Should You Get a Credit Card?

If you don’t have a credit card, you may be wondering if getting one is the right move for you. After all, we have all heard the horror stories involved with credit card usage – it is certainly very easy to let spending get out of control and to find yourself buried in debt. At the same time, there are many benefits associated with using a credit card as well. Therefore, in order to determine if getting a credit card is a good move for you, you should explore the pros and cons of credit card ownership.

Benefit #1 of Credit Card Ownership: Convenience

One of the greatest benefits of having a credit card is the fact that they are so convenient to use. Credit cards are accepted almost everywhere and are much easier to keep track of than cash and checkbooks. When it comes to pumping gas, you don’t even have to go inside when you have a credit card!

Drawback #1 of Credit Card Ownership: Debt

If you aren’t careful about your spending, it is easy to get yourself buried in debt. Once you add finance charges to your debt, you can find yourself paying hundreds of dollars each month for the convenience of credit card usage. Research has proven that people spend more when they use credit cards – so be careful and monitor your spending if you decide to get a credit card.

Benefit #2 to Credit Card Ownership: Protection

Having a credit card provides you with extra protection that you don’t get when you make purchases with cash, checks, or even debit cards. In fact, you are legally obligated to pay only $50 if someone takes your credit card and makes purchases with it. In many cases, the credit card company will waive the $50 as well. In addition, several credit cards offer purchase protection, extended warranty coverage, and even insurance coverage when you rent vehicles or when you travel.

Drawback #2 to Credit Card Ownership: Taxes

When it comes to taking out a loan, using a credit card isn’t necessarily your best option when it comes to saving money. Even if you happen to get a pretty good interest rate on your credit card, you may be better off using a home equity loan if you are taking out a big loan. This way, you can deduct the interest fees on your taxes. The finance charges you pay through a credit card are not deductible.

Benefit #3 to Credit Card Ownership: Rewards

Most credit cards offer some sort of rewards program. If you pay your credit card bill off at the end of the billing cycle, you can completely avoid finance charges while earning rewards with your credit card. Depending upon how much you spend, you could potentially earn hundreds of dollars each year with rewards credit cards.

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

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