Errors on credit reports can lead to declined loans, higher deposit requirements and even a rejection for employment. A recent FTC (Federal Trade Commission) study revealed that 25% of consumers had errors on their credit reports. Errors which may result in higher consumer costs which can include paying more for car insurance, or not being approved for services like power, cable or internet, without large deposits. Imagine moving and having to shell out $200 to $400 to activate each service, rather than having the connection fee included with the first bill. Or being stuck with a provider you don’t like because of the high deposits required due to poor credit. Your credit file is used in many applications beyond getting a loan, making its accuracy a top priority. Read more
Archive for month: October, 2015
Most consumers have never heard of the Credit Card Accountability Responsibility and Disclosure Act (CARD Act), even though it impacts everyone who uses credit cards or carries credit card debt. Legislation was signed into law in 2009 during the financial crisis and most of the provisions went into effect by February 2010.
Practices that were once common but are now banned include arbitrary cut off times before 5 pm on the due date, changing due dates each month, raising rates on existing balances without a default and only providing a 14 day grace period from the bill date to the due date.
Studies have shown that these consumer protections are saving customers billions of dollars each year from reduced fees, reduced interest rates and more favorable terms. A number of provisions directly impact the majority of consumers. So, we have highlighted their impact on your wallet.
They include the following 10 key changes. Read more
Spending thresholds help establish value in spending decisions. Often this mental exercise is done subconsciously. Think about it. When you find an item you like, you determine how much it costs. Then you either quickly decide to buy it, “because it’s only five bucks” or a consciously evaluate the item. At that point you either talk yourself into or out of the purchase depending on your mood, how much money is in your pocket, and how much you feel you need the item.
Let’s say there’s a barber who charges $30 a haircut. A person, for example, may think, it’s only a haircut, I’ll get it. That’s their subconscious spending threshold, $30 dollars. Everything below that amount is decided without much thought or energy. Everything over that amount needs some level of consideration. Read more
For most consumers, filing bankruptcy and obtaining a discharge was supposed to mean the debts were erased off the credit report and they would receive a fresh start. Unfortunately for millions of Americans, until recently, this has not been the case. Even with bankruptcy relief, zombie debts can create havoc on consumers due to illegal reporting practices of the banking industry.
Top banks, including Bank of America, JP Morgan Chase, Citibank and Synchrony Financial (Formerly GE Capital) had instituted reporting practices, leaving debt on credit reports even after they have been sold to a debt buyer and/or later discharged in bankruptcy. These are often referred to as zombie debts because consumers have been unable to correct reporting errors when these debts show up after years on a credit report. Read more