Credit Card Bill Of Rights – Protecting Consumer Credit Card Debt

The Credit Card Accountability, Responsibility And Disclosure Act or simply, the Credit CARD Act of 2009 introduced by President Barack Obama might just be a corner stone in the US financial industry. This new credit card legislation ushers in a new era of consumer credit card debt protection and acts as a credit card bill of rights for consumers. Under the new act the following will need to be observed by credit card companies:

• Retroactive rate increases: The new credit card act prohibits lenders from increasing rates at their wish. Only if the credit card debt has been unpaid for over 60 days can the rate be increased.
• Agreements posted online: According to the new credit card legislation the credit card issuers will need to post consumer credit card debt contracts online to allow more transparency.
• Shifting of payment dates: The credit card bill of rights prohibits the shifting of repayment dates by the credit card companies. If a certain date has been set out in the contract, it needs to be followed.
• Mailing of statements: Credit card companies are now required to mail out the credit card debt statements to consumers 21 days prior to the payment being due.
• Clearer and more transparent disclosure: The credit card bill of rights is aimed at doing away with hidden fees and charges and is targeted at bringing in complete client disclosure. This will enable consumers to make a more informed decision about credit card debt.
• Marketing to teenagers and college students: Under the new credit card legislation, credit card companies are being dissuaded from advertising their services to teenagers or college students.

Credit CARD Act 2009 – Effect on Consumer Credit Card Debt

The question on everyone’s mind at the moment is “How is it going to affect me?” The new credit CARD act will affect consumers in the following way:

• Lesser availability of credit: With the new credit card act in place, consumer credit policy across the board will be tightened thereby reducing the approval rate for new credit cards.
• Price of credit: The new credit card legislation has not placed a cap of fees and charges charged by credit card companies. This in the long run would mean that credit card companies may charge higher interest rates and fees on new credit card debt.
• Rating system to be used: Just as any other credit instrument, credit card companies will need to use a 5 star rating for consumer credit applicants and will have to disclose this rating on the approval and credit instrument.
• Higher repayments: With the increased interest rates charged by the credit card companies, it may lead to increased repayments, thereby affecting your net cash flow.

Credit CARD Legislation 2009 – Effects On My Credit Report?

While the new credit card legislation is an attempt on the part of the government to protect consumers, the credit card act is also an attempt to ensure that consumers live within their budget and not beyond it. Credit cards are meant to be used as a lifeline and not be solely dependent upon. Hence in the long run with the new credit card debt reforms, this will lead to lower overall debt on your credit report. In addition the regulation to not shift repayments dates will mean that clients will have better repayment history and eventually a better and improved FICO credit report.

A credit report with good FICO scores is called a good credit report. Established by Fair Isaac Corporation which introduced mathematical formula to determine and evaluate credit scores. It is used as the most firm base to establish a creditor’s credibility. In the United States the FICO scores considered as an average score on a scale of 850 is 723. A good credit report is considered as the one that is having 750+ FICO scores. FICO scores are a reflection of what and how much you are spending.

Mix Accounts make a Good Credit Report

They cover all the possible ways of spending and gaining money which includes bank transactions, credit card matters, installments, loans, both mortgage and company accounts. It can be a good option to use these mix accounts to make a good credit report, yet it can’t be followed as a phenomenon. It is always suggested to open and operate only such accounts that are intended to be used. Otherwise, accounts that will not be used in near future should not be opened until required.

Must Avoids

In a good credit report, it is important that it holds no dark areas and no red marks at all. These specifically are serious delinquencies such as late payments appearing in one or more than one accounts. There shouldn’t be any account with a filing record. Meaning thereby, there shouldn’t be any record of your accounts passed on to a recovery agency for the collection of due payments.

One or more recent accounts that are past due and are not in your knowledge, appear on the credit report as a blow.  The level of delayed and non payments is a crucially important thing that can make a good credit report a bad one. Time passed after a payment has been neglected and delayed counts a lot in damaging or upgrading a credit report. If there are any bad accounts at all, which should not be, their numbers also matters.

Another important factor that is connected with the present delinquent accounts is the amount owed through them; it is vital to know how big the amount payable is. Credit cards proportions shouldn’t be too high in a revolving account; debit and credit should be in proportion and accordance. For a good credit report, there should be an established history of properly managed accounts.

Low Credit Score Damage

A low credit score can damage the credit report as well and also can become a cause of high interest rates. FICO scores make the base of financial life by presenting the person less or more attractive for the lenders. A good credit report should not have any declined credit requests.

Importance of a Good Credit Report

A good credit report is important to have success in various matters. These can be taking a home on rent, purchasing a vehicle or a property on installments, applying for loans, applying for a job, and purchasing an insurance policy. With a good credit report, a person feels light and free, because with its help, he can be contacted for offers of loans and certain a like benefits.

If you want to boost your credit score, you definitely need to make it sure that you are paying debts on time and they have been properly listed in your credit report. These different accounts are referred as trade lines and it is possible that some company may forget to report it to credit reporting agencies no matter how well you have been dealing with it and you must thoroughly check that good information making their way into your credit report canceling out bad information.

Mortgages, credit cards, auto loans and other accounts likes of furniture stores, gym memberships, jewelry stores and furniture stores are reckoned as trade lines on a credit report. When these accounts are posted for a specific period of time, they are known as seasoned trade lines.

Authorized and primary user trade lines are two basic types of trade lines. You can be added in the credit file of your friend, boss, father or anyone with good credit file. Normally, this is done through credit cards, as the authorized users can ask their credit card company to issue an additional card for the person you authorized for it. This added authorized user will have the same payment and history record that are found on the credit file of the primary user. However, you must keep this fact in mind that if primary user is late to its payment will also show you as late to this payment.

While primary user accounts are those kinds of accounts that appear only in your name. If you get some loan from a bank or auto dealer, you are reported for the account as the primary user. There are many programs that claim that they can quickly add thirty to seventy points in your credit file for every added trade line.

Nothing can be a better substitute than to pay your debt on time every month, however, you must also keep this fact in mind that there are many other ways to improve credit report and the key is to know what exists in your credit report and what you can do to keep it accurate.

Unfavorable card use, late payments, account collection, account closure and absence of credit references are aspects that damage a credit report. To get a good credit report you should have more credit scores, which range from 300 to 900. Credit scores up to 720 or higher are best to gain favorable interest rates.

You can get as good a credit report as serious you would be. To get an excellent credit report, make it a point not to miss the minutest economical issue as a cell phone and cable bills. These are items that are treated with less care and bills piling up are not given much importance. But you get to know the bad consequences when you pay for the missed payments records.

Getting an on time payment record onto your credit report is really important to achieve certain economical benefits with a positive impression and less trouble. Make it a priority to get your bills paid on time so to avoid a black mark appearance on your credit report.

Take extra care for prompt payments of cell phone bill and cable bills, because they help the lender to determine your payment schedules. First of all try to avoid late payments, second and most important, don’t let your bills go unpaid. Keep the receipts of the payments you make for an efficient update of records in your credit report. Do not ignore any payment notices and reminders, immediately call the billing authority ensuring a prompt payment.

Make sure that when you pay your cell phone bills and cable bills, they must appear onto your credit report. It would make more credit points if you pay your bills through credit cards. You can also earn more credit points by making daily routine purchases through credit cards. Set aside the cash for each purchasing you do through credit card, this will help you to an ensured payment.

The benefit of getting your cell phone bill and cable bill onto credit report is that it will be an evidence of your promptness and keen nature of maintaining your economical status. As, both of these are amongst the basics of a routine life style, they are used by almost every person earning a reasonable income.

You must be aware of the fact that your credit report can be viewed online. Credit inquiries are done when you apply for a loan or sometimes in job application too. There are also online services that allow up to four companies to examine your credit report, when loan is applied for. It is really important to get positive credit scores on your credit report to help you run your finances the way you want them to.

To begin with, these agencies that they obtain the credit scores from are paid by the creditors to pull out your credit history. In addition, there are no great incentives given to these credits reporting agencies are fairly negligible. Hence they do not make special efforts to ensure that the reports are correct. The creditors as well as the agencies do have an obligation to correct the report in case of errors but it will be you who would have to take the initiative.

Secondly, creditors make it extremely simple to get the credit and they make sure that you keep the credit for long. If we trace what has happened in the United States of America over the past few years then we see that a majority of people have got the credit cards and the bankruptcies. Credit card companies were making money initially, however things started to change when the number of bankruptcies started increasing. According to the newer law through Congress in 2005, it made it harder for the masses to file for a personal bankruptcy.

Lastly, there are a lot more things that you can do in order to better the credit score. This information will not be given out by your creditors. It is important to know that there are different types of consequences attached to the different types of credit cards available in the financial market. Even though the primary 10% discount may sound lucrative, but the do not fall for the departmental credit cards. They are looked across against your favour in the credit report by all the lenders since these cards are issued to anybody who has a social security number. Always get a Visa or a MasterCard from one of the trusted banks or financial institutions. These are the cards that will help you improve your credit history and scores. However, make sure you do not use more than 75% of the credit in one go and pay them off regularly every month. It is imperative to restrict yourself to a maximum of three to four cards.

Make sure that you do not cancel your credit cards once they get old. A portion of this credit score is built on your credit history and when you cancel this card; your history goes with it. If the credit card companies try to charge you an annual fee for keeping the old credit cards, you can simply inform that you need to cancel it. A majority of the credit card companies will just end up waiving the charge.

You should register an immediate dispute for action if you find a false or unusual entry in your credit report.  Usually these credit reports have false entries related to your account or sometimes show some new lines of credit that you haven’t originated. According to the new laws, consumers can dispute directly with any credit reporting agency if they find some false or wrong information in their credit report. These agencies are expected to respond within 45 days if your dispute is not related to declined credit or identity theft.

You need to follow the under stated procedure to change wrong or false information in your credit report.

First you need to inform the credit reporting agency about the existing false information in your credit report and you should do this by sending them a letter. The credit agencies investigate the information and send your provided data to the organization where they receive that information.  When the provider of the information receives this dispute notification, it begins investigation and review that provided information.  Then, the provider informs the reporting agencies whatever it finds regarding these disputed issues. If the provider really deems the information false or inaccurate, it should inform all three credit reporting agencies so that all three credit agencies make correction accordingly. When the investigation is completed, the consumer reporting agency provides you a corrected copy of your credit report if any change related to these disputes is made in your credit report. You can also get the address, name, phone number of this false information provider from the credit bureau.

You must keep in mind that your credit report plays an important role in your financial life ,as it helps to determine whether some loan can be approved for you or not. But sometimes, you have to pay the price for others mistakes and you are refused for some loan because of existing wrong information in your credit report. You must make it certain that your credit report is free from errors and false information and you can do so only if you check your credit report periodically and make it sure that all the available information in your credit perfect and without any false information. Your credit report serves as a life line if you want to get some loan approved at reasonable interest rates and you should spare no effort to keep this life line free of errors and inaccuracies.

It is not so that credit reporting agencies always put the right information in your credit report. These credit reporting agencies often have bad information because of several reasons. By fixing the wrong information in your credit report, you can not only avoid turning down your loan requests, but also get the best possible loan rates.

People who are planning for fixing their credit report, they definitely need to deal with the reporting as well as with the debt. You financial condition may get worse if you don’t act immediately to rebuild your credit status.

The thing that they need to do in this connection is to attack their credit report from two directions: via reporting agencies as well as via creditors who have reported the bad information about you.

When it comes to fixing credit report errors via credit report agency, your first step is to find out where the mistake lies. If you haven’t got the recent copy of your credit report, you can contact with credit agencies and get the copy of your recent credit report.

Your next step is to find out the proofs and evidence which you find helpful for credit agencies to easily fix the errors from your credit report. You must make the copies of all those documents that you have sent credit report agencies for this purpose. It is possible that you might have to fix your credit reports many times and that’s why it is quite important sending only copies of these documents not the original ones.

You must also enclose a covering letter with all these documents and include your Social Security number, full name, date of birth, address, creditors’ name and the other details of the related account, some other previous address or name that you have used in the disputed period and references of all enclosed documents. You also need to add some specific instructions regarding what is wrong in your credit report and how do you want to fix it.

One of the most important steps is to send this letter through a registered mail service. It is expected that credit reporting agencies would investigate legitimate claims and fix the errors the credit report in 30 days.

There can be several reasons that make you fix your credit report including clerical errors, ex-spouse credit problem, you have identity theft victim etc.

After fixing these errors from your credit report, you may find yourself in need of building credit to enhance your attractiveness to different lenders.

Aside from the above mentioned, a credit report has information about your current and previous addresses, telephone number, date of birth, employment information and social security number. There is also a section which includes information about matters of public record like tax liens, bankruptcies and civil judgments. In short, a credit report is a credit history of an individual that includes information related to almost each and every aspect of this person’s financial life.

But the question is how an individual’s credit report can be obtained or is it lawful to obtain an individual’s credit report without his/her permission? There is a lot of information related to an individual’s credit history in a credit report and that’s why it has been declared unlawful to obtain an individual’s credit report without his/her permission.

Under federal law, any person (under false pretense) who willfully and knowingly gets information on a consumer from a credit reporting company e.g. get a credit report without his/her permission, this person will be fined under Title 18 US Code, or to be imprisoned for at least two years, or may get the both.

However, someone with a legitimate business need can be given access to your credit history and they include companies who considering granting you credit, insurance companies, landlords, employers (but with an individual’s consent), state or local child support enforcement agency, for account monitoring purposes for the companies with which you have a credit account and any government

Usually, written consent is required to an employer or prospective employer to obtain an individual’s credit report. Similarly, different potential creditors seek individuals’ permission to review their report.  However, an individual’s permission is not required when inquires are done regarding pre-approved credit offer.