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Credit Scores may improve with new laws

By Sally Maison
Published: Friday, May 14th, 2010

PIXTAL-00024651-001The passing of the Credit CARD Act of 2009 has put certain restriction on the management, marketing and use of credit cards. The younger section of society finds it harder to build credit with the new regulations.

In order to maintain a more accurate credit report and to ensure steady development of credit scores, consumers are required to maintain credit to an acceptable level so as to receive loans from banks, money lenders, for employment and other purchases. Consumers in some cases fail to understand the importance of low interest rates and lower interest rates are favorable to both the consumer and his credit report.

Many banks decide the interest rates for customers based on their credit reports. Consumers who show lower credit scores tend to receive higher interest rates and customers who have better credit scores get more stable interest rates. Certain consumers who have very low scores do not have their loans approved in most cases.

How to create a good credit score?

New state laws prevent youngsters below the age of 21 from getting credit cards. The exception to that rule is only when they have a joint account with another adult or show undeniable proof that they can repay bills. Minors who have accounts cannot get a higher credit limit without the consent of their parents or guardians.

Promoting credit cards at college events and around the vicinity of colleges is prohibited and free gifts which companies sometimes provide youngsters with have been curbed. Almost half the student who graduate have high debts and very bad credit reports. The new rule will ensure that youngsters do not receive credit cards before they turn 21 and that they do not rip apart their credit scores without the proper understanding of how credit works.

Youngsters now own ATM cards. Which provide them with easy money transactions. Banks now constantly update customers on the status of their ATM and their credit. Most banks show the credit on ATMs in credit reports.
Consumers can now for a nominal fee, add information which they believe will help their cause when they need loans and lack the credit for it .Consumers can request credit bureaus to contact the required personnel who have information on the consumer’s credit report or about repaid debts which should be on the consumers’ credit report.

These queries can be avoided by repaying loans without any delay.

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