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  • Charge cards factor the most into credit ratings

    The Consumer Financial Protection Bureau has released a brand new study on credit reports that determine a consumers' ability to get credit. According to the report, how a customer utilizes his or her credit card is the most telling aspect in getting a score. Article source:

    Why not necessarily get more info with https://personalmoneynetwork.com/?



    Responsible credit card use highlighted



    That most likely is not surprising to most people. However, it does spotlight where consumers should concentrate their efforts in order to keep credit scores high for the next time they need to buy a car or want to take out a mortgage.



    Richard Cordray is the CFPB director. He explained: “Credit cards are given great weight in credit profiles -- a lesson that consumers could end up learning the hard way.”



    A credit score is determined quite a bit by the information from credit card businesses. In fact, over half of the data on the credit score report comes from the businesses.



    Cordray said that during the holiday season some customers may be tempted to fill out a brand new retailer charge card application to be able to obtain a discount on gift purchases. However, if they do not use that card in a responsible way, such as paying off all charges each month, they could find themselves easily falling into a debt spiral. He said, “it could end up costing a lot more down the line when they go take out a mortgage and that credit card is a black mark on their credit report.”



    Using it a ton during recession



    During the downturn in the economy, consumers have had a really hard time with credit cards. They are using charge cards for daily expenses instead of just emergencies now. In fact, the stagnant wages, high joblessness and increased costs have made it really hard to survive without some form of credit.



    The CRL said Wed that around 40 percent of low- and middle-income families routinely use plastic to meet daily needs, such as food, rent and clothing. So apparently the teaching point from the CPFB report is one that Americans would do well to take to heart.



    Help from government



    Because of the Charge card Accountability Responsibility and Disclosure Act of 2009, many customers have been able to reduce high credit card balances during the recession. The Act has made it impossible to have extra high penalties and fee structures that do not make any sense. The reform has been helping many customers.



    Essential to Stay informed



    Less than 20 percent of customers really get their credit rating regularly, according to the Consumer Financial Protection Bureau. Customers can point out errors or fraud more effortlessly and fix any difficulties before it shows up when applying for a large loan if they are keeping track of their credit. Americans are certainly not doing enough when it comes to staying informed.



    Sources



    Washington Post

    Daily Finance

    Fox Business

  • Please remove this,BMR - no place here obviously - no idea if the links are dodgy.

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