Credit Card Crackdown

The Fed is regulating credit card companies to benefit the users and help improve consumers' credit. But these rules will not go into effect until 2010.

Posted by Katherine Mejia

How knowledgeable is the consumer when it comes to their finances?

Posted by C Brown
Consumer loans, credit cards, and credit score are on a lot of peoples' minds today. Do you know how much you really owe creditors? Do you know how to monitor your credit reports? Can you keep track of your personal finances and do you know how to read and understand everything that your creditors are giving you? A lot of people would answer no to these questions. Too many people don't have enough knowledge about their personal finances. Many consumers are defaulting on loans or taking out second mortgages to keep their houses. Many people are talking to debt consolidators to help them get a handle on debt. This seems like a great idea because creditors stop calling and bills stop coming every day, but in all actuality, you are still paying creditors less than their minimum payment, which means they are still reporting that you are paying your loans back late which really hurts your credit score. Loans were meant to help people, but now all loans and credit cards have done for people is get them into financial trouble that they can't get out of. More homes are being foreclosed on. More people are losing their job because of the economic crisis, which makes it ten times harder for people to pay back loans and harder for banks to loan people more money. Now is also the best time for Cyber crooks and identity thefts. There has been more complaints in 2008 during the economic crisis of bank account fraud. There has been thousands of emails and now even text messages sent out to mainly corporate executives or people who are financially stable in order to steal personal information whether it is to take $10 or $40 out of their account. Since these emails are personally addressed to these financially stable people, they open them and it sets a virus in their computer giving the thief the opportunity to retrieve vital information about financial markets even before the information is released to the public. Consumers need to read and be knowledgeable of what is happening in our economy, and how our economy directly affects the consumer.

http://www.articlesbase.com/finance-articles/how-does-consumer-debt-counseling-services-affect-my-credit-score-675369.html


http://www.iht.com/articles/2008/04/21/business/21cndbank.php#top


http://online.wsj.com/article/SB123318475748226305.html

New FICO Score System

By: Alcides Hoy Jr.

Fair Isaac - they're the company that develops the formula that determines your FICO credit score - is rolling out a new version FICO 08 with the credit bureau TransUnion.

Now this new FICO score is supposed to be an improvement and we really welcome any improvements to credit scoring since there are so many mistakes that can be made with credit scores.

Here's what this score will mean for folks: The new FICO '08 scoring model will really target folks in the subprime category of scores in the 600s. These are the people that lenders are really struggling to predict how well they might pay their bills.

Click to Read More

The Credit Score Blues

By: Alcides Hoy Jr.


I found this video that's pretty funny but also interesting to many of us who don't know much about credit scores. Click to view video

How Credit Scores Impact Mortgage Applications

This video shows Victor Benoun, President of The Mortgage Source explaining how credit scores impact mortgage applications, and how to improve your credit worthiness.



Posted by Andrew Moran

Credit Scores: What You Need to Know

Posted by: Andrew Moran

Many of us use credit cards on a daily basis as a means of convenience in order to purchase the goods we need without carrying large amounts of cash on-hand. In order to be approved for a credit card, or any other type of loan, consideration must first be given to the individuals credit score. A credit score is also known as a FICO score, moreover, it is the score derived from the Fair Isaac Corporation. The credit score that they develop ranges from 300-850, and takes all types of credit, mortgages, and loans into account. 30% is determined by your payment history; 30% is based on the amounts you owe each of your creditors, and how that compares with the total credit available to you; 15% is based on the length of your credit history, how long you have had accounts, and how long it has been since there was any activity; 10% is based on the number of accounts you have recently opened compared with the total number of accounts you have; finally, 10% is determined by the types of credit you have used.

This FICO score can have significant implications regarding future home loans, auto loans, college loans, etc. In order to receive the best loans with the best rates a score of 700 or better is generally needed. Since FICO scores are extremely volatile, it is important to make sure you avoid falling into credit traps. Five things that everyone must try and avoid are:

1. Late Payments

2. High Card Balances

3. Closing Credit Card Accounts

4. Having Too Many In-Store Credit Cards

5. Fines

Avoiding all of these things is sure to provide a consumer with a relatively good credit score. Having a good credit score is essential for obtaining future loans, and without a good FICO score, it is nearly impossible to get loans. For instance, merely applying for a home loan will make your FICO score drop an average of 5 points. The score will drop because creditors will request a copy of your credit report in order to make a decision. This inquiry goes down on your report, and will affect your FICO score for a year. In this regard, it is extremely important to manage your credit. If you wish to view your credit score, reports are available online annualcreditreport.com.

Sources:

http://money.cnn.com/2006/07/10/pf/credit_killers/index.htm

http://www.nytimes.com/2009/01/06/your-money/credit-scores/primerscores.html

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/24/AR2009012400163.html