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July Consumer Credit Report Anticipated

By Faye Mergel
Published: Friday, September 25th, 2009

The Federal Reserve will release the Beige Book this coming Tuesday. Credit specialists expect lower activities in the debt sector due to the Car Allowance Rebate System (CARS) which took off on the first of July last month.

July Consumer Credit Report AnticipatedThe Beige Book is a document which the Fed Reserve publishes eight times a year. It determines how well the economy is doing through information provided by banks from 12 Federal Reserve Districts.

What is in it for people who do not buy stocks at Wall Street? This book contains the consumer credit report for July. Through the release, consumers will know how much people in their district owe in debt to banks and other creditors. Tuesday’s release will also outline the total amount of money US card holders have borrowed in the past month. By knowing how much the debt sector is doing, consumers will know whether September is a right time to apply for a mortgage loan or get a new car.

This Book will also contain consumer sentiments. These sentiments are not only complaints and grievances of debtors. These are important in predicting the economy, allowing financial institutions to respond to the outlook and spending behavior of consumers.

The last consumer credit report was issued July 29 this year, containing information submitted prior to July 20. In that report, most Districts reported that lending activity either remained weak or stable. Increase was only minimal, with most consumers opting not to take up a loan to keep debt sheets clean.  Moreover, banks became more rigid in credit standards, becoming less lenient in granting loans to consumers whose reports were poor. Most economic sectors decided to reduce labor force, which also explains why application for refinancing and other loans weakened.
Economic analysts say that CARS boosted sales in the automobile industry, but it slowed down activities in the debt section. With this program offering up to $4,500 in cash incentives, consumers did not have to file a loan to get a down payment. 

Debt specialists advise consumers not to rely only on reports which the Fed Reserve will release on Tuesday. They tell consumers to check their credit report themselves and find out how well they are doing personally. They can get it for free so they might as well get one from each credit reporting agency: Equifax, TransUnion, and Experian. Consumers can use their personal reports to see how well they are doing compared to the rest of the country. This way, they can map out their next steps in making credit decisions and walk their way to being debt-free.

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