by First Rate Debt Solutions
20. August 2009 13:26
Starting today, there are some changes in the way credit card issuers will be doing business. These are just the beginning of some of the changes that are going into effect as part of a law signed in May by President Obama.
Under the new law, credit card companies must give you 21 days to pay your bills and a full 45 days of advance notice if they change any of the terms to your card agreement. Currently the law allows for only 14 days to pay your bill and 15-day notice period.
Most credit card companies have been preparing for this change for months and if our experience is anything to go by, consumers are not happy. Many card issuers are instituting annual fees, increasing minimum payment amounts, jacking interest rates and late fees. All of this is being disclosed on time but the bottom line is that it’s costing the consumer a lot more to use their cards. All in a time when money is already tight.
And don’t think if you’re a “good customer” you’re immune to these hikes because they appear to be hitting almost everyone regardless of their payment history and FICO score. The credit card companies are in the money making business and they are protecting themselves first…all at our expense.
If you are seeing changes to your credit cards and you don’t like them, take charge of your situation now. Don’t wait until you get yourself into trouble.
by First Rate Debt Solutions
2. July 2009 10:36
In this crazy credit crunch, even having good credit can hurt you. How, you ask? Because the credit card companies aren't just penalizing those who are making late payments or maxed out. It's just one more example of why consumers must always be looking out for themselves and making sure that they aren't getting into trouble. Read this article in Time magazine about how consumers with good credit are experiencing problems too.
http://www.time.com/time/magazine/article/0,9171,1904129,00.html
And if you have questions about credit cards or your credit card debt, the experts at First Rate Debt Solutions are here to help.
by First Rate Debt Solutions
12. June 2009 19:21
Most Americans have a general idea of what their credit or FICO score is. At the very least they know if it’s good, bad, or just so-so because at some point they’ve had to use that score to obtain some type of financing. But there are some misconceptions about a credit score that can cause confusion.
The Fair Isaac Corporation (FICO) is who determines your credit score based on a formula that takes many different factors into account. FICO scores are calculated from the credit data on your credit report.
Your credit score is not just simply, you have a credit, you pay on time and that automatically equals a good or high score. It’s not that simple. The actual formula that is used by the Fair Isaac Corporation is a secret but these are the five (5) main factors that affect your score.
- Payment history (late, on time, etc.) – 35%
- Amounts owed (especially in relation to the credit line) – 30%
- Length of credit history (how long have you had credit) – 15%
- New credit (how many new cards do you have) – 10%
- Types of credit used (bank cards, department stores, etc.) – 10%
All of these can either negatively or positively impact credit score which can come to a surprise to someone who makes all their payments on time but didn’t realize that because they are maxed out on most of their cards and have opened several new accounts, their score is not as high as they thought. Even things like other credit companies inquiring into your credit can lower your score.
Having a decent credit score (at least 620) is very important when you are going to apply for any type of major financing like a home loan or car loan. The higher score translates directly into a more favorable interest rate. Typically 720 and above will get you the best or most favorable rates available. However, tough economic times can wreak havoc on your scores and your financial situation. If this is the case, you may need to speak with a financial expert to re-evaluate your situation and make some changes that will help increase your credit in the long run. The consultants at First Rate are credit experts and can help you determine what you need to do to maximize your credit score.
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