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Manage Debts, Get Credit Report

By Faye Mergel
Published: Sunday, September 6th, 2009

Credit specialists say that now is the best time to settle debts. The economy is still struggling and with new credit laws, banks and other lending companies are expected to implement more changes in the coming months. Experts view that with the present economic situation, consumers should do their best to avoid credit penalties.

Manage Debts, Get Credit ReportBill Hardekopf, chief executive officer of a credit information site, says that now is “not a good time to learn that your card has been cancelled or that you have exceeded your limit.” However, with loopholes in the new credit law, this will come without consumers foreseeing it. Banks are now required to notify consumers 45 days before raising interest. The problem for consumers is that banks are not required by this new law or any previous law to inform clients if they are going to close an account or cut off credit limits.

To avoid being caught off guard, consumers are advised to check their credit report annually. A credit report, otherwise known as a credit file disclosure, can be obtained for free. Such reports can be requested via mail, through a phone call, or through the Internet. Online requests can be obtained immediately. On the other hand, requests made through phone and mail takes 15 days before delivery.

Financial reports from Equifax, Experian, and TransUnion contain details about all the overdue debt in a client’s credit history. However, a report does not contain the score of a consumer. Obtaining a score requires fee. Fair Isaac Company (FICO) gives credit score at $15.95 for each credit bureau. To get a score from all three bureaus, one must pay $47.85.

Chuck Jaffe, senior columnist for MarketWatch, says that the new law has “unintended consequences” and that consumers may face trouble if they are not mindful of their credit activities. Knowing how much one owes through a financial report is the best way to manage debt. Financial experts add that it is also an excellent way of noting discrepancies and correcting errors. Getting a report is one huge step towards improving a score or rating.

Hardekopf continues that consumers should not be lax with the extension in interest notifications. It may lull them to thinking that due dates are still far: “If you use this extra time to procrastinate paying your bill, you may forget and incur a costly late fee.” This new credit law is not yet implemented in full. Yet there are already numerous changes going all over the credit industry. The least that consumers can do is to make wiser decisions.

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