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Credit History and How It Affects You: Weekly Round-Up

A lot of people make financial mistakes that they wish they never committed. However, making unwise decision is a fact of life and individuals need to deal with the consequences of their action. Financial mistakes are usually reflected in a person’s credit history. It will enable them to take loans from banks and other institutions at a reasonable price.

Financial know-how should start when a person is quite young. The problem is, young people usually don’t know what their getting into when it comes to spending. That’s the reason why there is a recently passed policy that stops credit card companies from issuing cards to individuals below 21 years of age or until they can show proof of income. Young people with co-signers who can vouch for them can also apply for a credit card. In this week’s weekly round-up, we compiled a list of blogs that talks about the new regulation, provides tips on how to start your credit history right, and how to fix the financial mess you got yourself into:

Mary @ Mint Life updated readers about what’s happening in the credit scoring industry in the blog post “Reading, Writing, and…Credit Scoring?” The article is focused on helping kids develop their financial sensibilities to make better choices in the future. Aspects of money management for kids such as opening a savings account are discussed. In addition, kids today face more challenges because of the financial crisis so their credit score is more important than ever.

Ryan @ The Better Credit Blog wrote an article titled “10 Ways to Get the Upper Hand When Dealing with a Debt Collector”. It is a fact that most people experience being at the end of the phone line when a debt collector is calling. This situation is difficult for most people and this article talks about the issues people need to deal with. For one, collectors are trained to play with your feelings and emotions. Look at the call at this light to get an upper hand.

Finally, Ilyce from Think Glink posted the article “Credit Reporting Agencies and Your Debts”. It basically sums up how credit reporting agencies come up with your credit score. It is written in a Q&A format and provides some relevant information for readers.

Free Credit Checks

It has been stressed many times over by the Federal Trade Commission (FTC) and many consumer-advocacy organizations: credit reports should be, and is, free. Despite their efforts though, there are still a number of unscrupulous companies that want to seek to abuse consumers. These firms also divert consumers away from a government-backed site where they can get easy access to their free online credit report.

Even one of the credit bureau, Experian, has gotten the ire of FTC because of their Freecreditreport.com. The site has been under the FTC’s watch for some time now because they mislead people into believing they need to pay a certain fee to get their credit report. Additionally, another one of their tactic is to use the report as bait so that people will sign up to the $14.95 a month service that alerts members to changes in their status.

The government itself has not taken an active stance in discrediting the service, which is fast becoming a $1 billion niche. Currently, the biggest player in this niche is Experian. The company’s market share is over twice that of its three competitors. Experian spent $54 million on television advertising to attract the attention of this market.

The main issue with credit monitoring services is that most don’t actually need it. Most people who have signed up often do so unwittingly. Basically, all a credit monitoring service will do is provide consumers with updates about their credit files. While the service can be beneficial for identity theft victims, it is only a waste of money for the vast majority. Most individuals don’t modify their accounts drastically, and when they decide to, they are typically aware of what it will do to their credit rating. If any errors occur on the report, checking it and reporting to the appropriate credit bureau is often enough.  The greatest use for these monitoring services that I found was when I was taking actions to improve my credit score.  I was able to monitor my progress and see how my actions directly impacted my score.

Improve My Credit Score – Revisited

A few weeks ago, we provided a list of blogs that can potentially help you improve your credit rating. With the credit score situation becoming worse for many Americans today though, we decided to revisit this topic to let you in on the latest news, tips, and strategies you can implement in order to achieve a better financial well-being.

First and foremost, it is important to recognize that in certain cases today, the decline in your credit score isn’t exactly your fault. A lot of it is caused by external factors including the changes in legislation. This may seem like an inevitable event but reading the blogs below can help you gain a better understanding of your situation so you will be in the position to improve it:

Jim Wang @ Bargaineering provided 7 practical tips on how you can compare credit reports and improve your rating. If you’ve been reading up on the topic before, you probably already know the gist of the blog’s content. It basically talked about disputing inaccuracies, paying debt, and the strategies you need to implement with regards to opening and closing accounts.

Jack @ Family Finance Help entered a helpful post titled “Best Way to Improve Your Credit Score after Bankruptcy”. Even though this post is specifically targeted towards individuals who have experienced the devastation of bankruptcy, some of the insights are applicable to ordinary Americans. The blog also talked about treating bankruptcy as a last resort.

If you’re interested in fixing your credit scores quickly, then reading an entry from Protect Life may be useful for you. Whether you’re buying a new home, a car, or trying to get a student loan, it is important to be sure that your credit rating is acceptable to the lender. Otherwise, you might need to deal with high interest rates and get buried under debt.

Improve Your Credit Rating

With new reforms law being implemented in the finance industry left and right, it is almost inevitable for consumers to feel certain repercussions. The government, the banking industry, and the consumers are all adjusting to the new economic reality. There is a shake-up in almost everything from credit card practices, mortgage loan applications, and credit score. Our previous posts for this week dealt mostly about credit card practices. Now, we will look deeper into the expected changes on your credit report.

Justine @ Credit Karma talked about how your credit report can hurt your chances of landing a job. According to the Society of Human Resource Management, as much as 50 percent of companies look at the credit history of prospective hires. A lot of employers believe that an applicant’s credit report says much about his character, work attitude, and future job performance. For the 14.5 million individuals who had just lost their job, turning to their credit card can actually be damaging to their future employment. Be sure to have a repayment plan in place whenever you take on debt.

Sharon @ Mint listed the 10 Commandments when it comes to maintaining a good credit score. As you probably already know, the credit score can make or break your finances. In fact, it will even affect your chances of getting a job. Among the commands found on the post include not limiting loan types, not missing payments and not closing unused credit card accounts among others.

Tracy @ the Card Offers Blog offers advice to new credit card users with her post titled “What Does a New Credit Card User Need to Know?”. Basically, she cautions users against abusing their credit privileges. Less banks are issuing credit cards these days and they only do so when they have a reasonable expectation that the user can and will pay it back. If you make a lot of missteps on your first card, it might take years before additional credit is extended to you by any company.

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