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More Services For Credit Consumers In Year 2011

By Faye Mergel
Published: Thursday, June 3rd, 2010

FANCY-00019122-001Additional checks and balances are provided to credit consumer starting January 2011. With a couple of legislations already in palce to provide more protection to the consumers,different lending firms will have to revise the way they have been handling the business for the past decade. They will have to accommodate changes and improve their services in order to retain their customers and of course, in order to follow the ruling of the Federal Trade Commission.

To date, most creditors do not notify their customers about the changes int heir payment terms. It will simply reflect in their next payment that the terms have increased or that they dropped to subprime because of bad credit. Once this ruling takes effect, all lenders must be able to inform each customer who will be changing payment rates because of bad credit or other newly incurred financial information that affected their credit standing.

The lenders have two option: either they issue notices to specific persons everytime his payment terms change or the lender will issue a free credit report and score to all of his customers to allow them to see if anything changed in the amoung of their payment terms. Either ways, the person with changed payment terms will be notified about the changes and will have enough time to think about what actions to take before continuing the loan with the corresponding creditor.

While many creditors say that this is additional burden on their part, the Federal Trade Commission believes that this ruling is for the benefit of both parties. From the point of view of the customers, they are satisfied with this new ammendment of the Card Act of 2009 since now they will be notified frist before any changes happen in their payment terms for mortgage or car loans. Notifying them about changes, they say, will allow them to weight their available options such as refinancing if the payment term in that company is already too high.

The new rule will take effect in 7 months. From that time on, consumers will be able to receive news from time to time about their credit standing. This will make it easier for customers to track their finances instead of requesting credit reports from each of the three credit bureaus. At least, now that the lenders themselves will notify the customers about the changes, it will take less time and will be easier to counter check.

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