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Dedicate some time to reading credit notices

By Faye Mergel
Published: Saturday, April 2nd, 2011

29With new rules making a major change in the whole credit market, there is some good news for consumers as a whole. The secret behind credit scores and how the decision making goes on will be revealed. However, not much good is going to come out if it if customers don’t take some time out to read their credit notices. There will be extra notices and paperwork, but for a change, they will be worth reading. Federal rules that have come into effect since the beginning of this year have mandated lenders to provide more details about the credit record of the consumers, so that the customers understand the reasoning behind them getting less attractive features compared to some of the other customers in the credit market. In fact, for the first time customers can actually see what leads to the lenders approving cards for some and rejecting it for others.

Knowing more about your credit scores can actually take you a long way when it comes to savings. When you are financing your new car, the dealer has to give you another paper called your credit score and it will help if you read this out thoroughly. This knowledge according to some is powerful because when customers know about their credit score, they will be able to realise that they are considered riskier than they realised and that they need to take the right steps in the right direction in order to do better in the market.  The credit score is therefore a very good indication of where the customers stand in the market at any given time.

In fact, for some people who have done well for themselves a credit score as low as 650 could come as a surprise. But, the credit score is on the basis of consistency in bill payments, the overall debt and the credit history all of which are combined to decide how creditworthy an individual is on a scale, which is what the credit score denotes. These credit scores also explain the terms customers get whether it is with credit cards, banks giving out loans or insurance companies. Higher credit scores translate to lower interest rates, lower premiums and great credit card rewards. FICO is the company that calculates the credit scores. Therefore, before you shop for a new car or a loan, you need to get your credit report and read it.

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