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Credit Reports Get Better With Responsible Payments Says III

By Faye Mergel
Published: Saturday, March 6th, 2010

The activation of the bulk of the Credit CARD Act has a lot of people worried – with good reason. Although this new legislation is meant to protect consumers from abuses in the credit card industry, it does not necessarily make credit cards that much more safer for them. In fact, since the legislation’s activation actually introduces new traps for consumers, it can be argued that the legislation is making things much more riskier for credit card holders. The biggest risk for consumers with these traps is that, should they get unlucky enough to fall into them, there is a high chance that it is going to hit their credit reports hard.

Credit Reports Get Better With Responsible Payments Says IIICredit reports have become very important among consumers right now. Good credit reports mean better chances of securing loans and credit, the ability to secure or negotiate better loan and credit rates and, strangely enough, higher chances of securing employment which is quite a big deal considering the high rate of unemployment in the country right now. And that is just a few of the advantages of maintaining a good credit report.

Although the credit industry is getting a lot more complicated courtesy of the Credit CARD Act, the basics are still holding true. For instance, the most effective and reliable way to maintain a good credit report is to be a responsible borrower – meaning: pay off debts as soon as possible. A lot of analysts stand behind this view, not least of which is the Insurance Information Institute or III.

The III recently suggested the consumers that, if they want their credit reports to stay on the up and up, they need to pay their bills on time. According to the institute, on time bill payments is one of the biggest factors in maintaining a good credit report.

The III also suggests consumers ought to make sure that their credit usage ratio remains low. Other factors that affect a consumer’s credit report is how many delinquent credit card accounts the consumer has and how long he or she has been unable to pay these accounts.

Another thing that consumers need to do, beyond keeping up with their payments and avoiding debt as much as possible, is check their credit reports regularly, says III. Consumers need to check if there are errors in their credit reports and, if there are, have them corrected immediately. To help them with this, the government has released a federal law which allows consumers to get one free credit report every 12 month period from each of the major credit reporting bureaus.

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