Credit and Finance 101

Even the most responsible borrowers slip up sometimes. Maybe a utility bill went unpaid after you moved and the missed payment went into collections. Or, perhaps there are unpaid library fines or parking tickets in collections that are hanging onto your credit history and affecting your FICO credit score, which is widely used by lenders to evaluate your ability to repay a debt.

With the newest version of the FICO credit-scoring system, however, minor delinquencies are now overlooked in calculating creditworthiness.

On May 22, 2009, President Barack Obama passed the “Credit Card holders’ Bill of Rights.” This milestone measure received bipartisan support in both chambers and will make credit card issuers display fees more clearly and end many random abuses. This bill takes full effect on February 2010.

Once the bill is effective, credit cardholders should experience a more consumer-friendly experience when the credit card industry is required to play by clear and fairer rules.

The Credit Cardholders’ Bill of Rights will help credit card users by:

Make sure your credit reports contain the proper credit limits!

Some lenders do not report consumer credit limits. Instead they will only post the highest balance you have ever carried. Keeping proper credit limit information out of your file is not always an innocent oversight. It’s often done purposely by a lender to make you look less attractive to their competitors, so they won’t send you pre-approved offers. Worst of all, it lowers your credit score!