How the New Credit Regulations Can Help You Clean Up Your Credit
In the current economic climate, many people are focused on the status of their credit situation and how decisions made in the past will affect their future ability to obtain credit.
Lawmakers in Washington have been working to better regulate the credit industry and earlier this year passed the Credit Card Reform Act, which will take effect early in 2010.
With the rising number of defaults on loans and the likelihood that more and more people will find it difficult to make good on their payments due to financial hardship, this bill should prove to be a significant piece of legislation to Americans.
The Credit Card Reform Act will work to protect individuals from some of the previous practices followed by credit card companies.
For example, there will be restrictions set on when interest rates can be changed and how much advanced notice creditors need to provide so that people can opt to pay off or transfer their balances before the increases go into effect.
The legislation will also require creditors to pay off higher rate balances before lower interest balances when anything over the minimum payment is submitted.
This is intended to limit the interest paid over the long term of the loan and benefits those who maintain balances at different interest rates.
Additional changes such as how billing cycles operate and the assessment of fees will also be regulated by this bill.
The bill will also make it harder for individuals seeking new credit to receive it.
In addition to any benefits the new Credit Card Reform Act will provide to those who are struggling to pay off their current debt or those who have had difficulty paying off debt in the past, there are ways to improve your credit score and your credit ratings on your own or with the help of a credit repair specialist.
By doing this, you make it more likely to be able to obtain additional credit in the future despite the increased restrictions on offering credit and you will receive lower interest rates when you do.
Credit repair and credit services companies can work with individuals to review the current status of their credit and to improve their credit scores.
Not all credit repair companies are equally effective at improving credit scores.
Some companies can delete as much as 80 - 90% of derogatory items on a credit report by using consumer protection laws, such as the FDCPA, FACTA, FCRA, HIPAA, and FCBA, as well as various state laws to legally and permanently remove derogatory items off of credit reports.
What makes this method of repairing credit so effective is that the deletions are permanent.
Other companies simply dispute derogatory line items on a credit report, which at best usually removes about 30% of the items.
On average, about 65% of the items deleted still wind up back on the credit report within a span of six months.
It is best to shop around to find a comprehensive credit services company that works to permanently remove the derogatory items on your credit report, rather than simply disputing them.
A company that also provides advice and educational information related to how to keep your credit strong going forward is also beneficial.
While the Credit Card Reform Act is the government's attempt at protecting Americans against unfair practices leveraged by creditors, it is only just one step in what it takes to improve an individual's credit.
Working with a credit services company that can remove derogatory credit items and can provide advice on how to more responsibly and successfully use credit to improve credit ratings will help individuals maintain a healthy credit outlook for the future.
Lawmakers in Washington have been working to better regulate the credit industry and earlier this year passed the Credit Card Reform Act, which will take effect early in 2010.
With the rising number of defaults on loans and the likelihood that more and more people will find it difficult to make good on their payments due to financial hardship, this bill should prove to be a significant piece of legislation to Americans.
The Credit Card Reform Act will work to protect individuals from some of the previous practices followed by credit card companies.
For example, there will be restrictions set on when interest rates can be changed and how much advanced notice creditors need to provide so that people can opt to pay off or transfer their balances before the increases go into effect.
The legislation will also require creditors to pay off higher rate balances before lower interest balances when anything over the minimum payment is submitted.
This is intended to limit the interest paid over the long term of the loan and benefits those who maintain balances at different interest rates.
Additional changes such as how billing cycles operate and the assessment of fees will also be regulated by this bill.
The bill will also make it harder for individuals seeking new credit to receive it.
In addition to any benefits the new Credit Card Reform Act will provide to those who are struggling to pay off their current debt or those who have had difficulty paying off debt in the past, there are ways to improve your credit score and your credit ratings on your own or with the help of a credit repair specialist.
By doing this, you make it more likely to be able to obtain additional credit in the future despite the increased restrictions on offering credit and you will receive lower interest rates when you do.
Credit repair and credit services companies can work with individuals to review the current status of their credit and to improve their credit scores.
Not all credit repair companies are equally effective at improving credit scores.
Some companies can delete as much as 80 - 90% of derogatory items on a credit report by using consumer protection laws, such as the FDCPA, FACTA, FCRA, HIPAA, and FCBA, as well as various state laws to legally and permanently remove derogatory items off of credit reports.
What makes this method of repairing credit so effective is that the deletions are permanent.
Other companies simply dispute derogatory line items on a credit report, which at best usually removes about 30% of the items.
On average, about 65% of the items deleted still wind up back on the credit report within a span of six months.
It is best to shop around to find a comprehensive credit services company that works to permanently remove the derogatory items on your credit report, rather than simply disputing them.
A company that also provides advice and educational information related to how to keep your credit strong going forward is also beneficial.
While the Credit Card Reform Act is the government's attempt at protecting Americans against unfair practices leveraged by creditors, it is only just one step in what it takes to improve an individual's credit.
Working with a credit services company that can remove derogatory credit items and can provide advice on how to more responsibly and successfully use credit to improve credit ratings will help individuals maintain a healthy credit outlook for the future.
Source...