The Consumer Financial Protection Bureau has launched a brand new study on credit reports that determine a consumers' capability 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.
Always responsible use of cards
A lot of people are not surprised by the belief that credit scores are impacted by charge cards. There are ways to use your card to be able to make it easier next time you need a loan for your car or your 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 charge card corporations. In fact, over half of the data on the credit score report comes from the businesses.
It is simple to fall into a debt spiral when consumers use credit cards irresponsibly. When consumers go to take out a mortgage in the future, they might end up having to pay a lot more due to the black mark on their record, according to Cordray. He explained that many consumers will be getting retailer charge cards during the season to get discounts on gift purchases, which is perfectly alright as long as the card is used responsible.
Hard on consumers
During the economic downturn, consumers have had a really hard time with charge cards. They are using charge cards for daily expenditures rather than just emergency situations now. In fact, the stagnant wages, high unemployment and increased prices have made it really hard to survive without some form of credit.
The Center for Responsible Lending 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 evidently the teaching point from the CPFB report is one that Americans would do well to take to heart.
Act to alter things
Because of the Credit 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 extremely hard to have additional high penalties and fee structures that do not make any sense. The reform has been helping many consumers.
Get information and Stay informed
When it comes to staying informed, Americans are not up to speed. It is very important to keep track of credit, so it does not shock customers when they apply for a loan and find out there is a massive hit. It is also much easier to take care of any issues and watch for fraud. Less than 20 percent of customers get copies of their credit rating though, according to the CFPB. There is definitely room for improvement.
Always responsible use of cards
A lot of people are not surprised by the belief that credit scores are impacted by charge cards. There are ways to use your card to be able to make it easier next time you need a loan for your car or your 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 charge card corporations. In fact, over half of the data on the credit score report comes from the businesses.
It is simple to fall into a debt spiral when consumers use credit cards irresponsibly. When consumers go to take out a mortgage in the future, they might end up having to pay a lot more due to the black mark on their record, according to Cordray. He explained that many consumers will be getting retailer charge cards during the season to get discounts on gift purchases, which is perfectly alright as long as the card is used responsible.
Hard on consumers
During the economic downturn, consumers have had a really hard time with charge cards. They are using charge cards for daily expenditures rather than just emergency situations now. In fact, the stagnant wages, high unemployment and increased prices have made it really hard to survive without some form of credit.
The Center for Responsible Lending 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 evidently the teaching point from the CPFB report is one that Americans would do well to take to heart.
Act to alter things
Because of the Credit 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 extremely hard to have additional high penalties and fee structures that do not make any sense. The reform has been helping many consumers.
Get information and Stay informed
When it comes to staying informed, Americans are not up to speed. It is very important to keep track of credit, so it does not shock customers when they apply for a loan and find out there is a massive hit. It is also much easier to take care of any issues and watch for fraud. Less than 20 percent of customers get copies of their credit rating though, according to the CFPB. There is definitely room for improvement.
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