The Consumer Financial Protection Bureau claims that how you use your charge cards has the most effect on determining your credit rating. The conclusion was one of several in the CFPB's new study of credit reports.
Always responsible use of cards
Customers should certainly focus their spending in an effort to increase credit scores for the next time they need credit. It is not a surprise to most people, and responsible card use is always encouraged.
Richard Cordray is the Consumer Financial Protection Bureau director. He explained: "Credit cards are given great weight in credit profiles -- a lesson that consumers could end up learning the hard way."
According to the CFPB report, more than half of the data on the typical credit score report comes from credit card companies.
Cordray said that during the holiday season some consumers may be tempted to fill out a new retailer charge card application in order to receive 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 very 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 rating."
Recession and credit card use
During the downturn in the economy, customers have had a really hard time with credit cards. They are using charge cards for daily expenditures instead of just emergencies now. In fact, the stagnant wages, high joblessness and increased prices have made it really hard to survive without some form of credit.
The Consumer Financial Protection Bureau teaching might be needed after all. About 40 percent of all low- to middle-income families use charge cards to pay daily expenses such as food, rent and clothing, according to the CRL.
Safeguarding customers with the Charge card Act
Due to the Credit card Accountability Responsibility and Disclosure Act of 2009, many consumers have been able to lower high charge card balances during the recession. The Act has made it impossible to have additional high penalties and fee structures that do not make any sense. The reform has been helping many consumers.
Stay informed
When it comes to staying informed, Americans are not up to speed. It is important to keep track of credit, so it does not surprise customers when they apply for a loan and find out there is a massive hit. It is also much easier to look after 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 surely room for improvement.
Always responsible use of cards
Customers should certainly focus their spending in an effort to increase credit scores for the next time they need credit. It is not a surprise to most people, and responsible card use is always encouraged.
Richard Cordray is the Consumer Financial Protection Bureau director. He explained: "Credit cards are given great weight in credit profiles -- a lesson that consumers could end up learning the hard way."
According to the CFPB report, more than half of the data on the typical credit score report comes from credit card companies.
Cordray said that during the holiday season some consumers may be tempted to fill out a new retailer charge card application in order to receive 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 very 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 rating."
Recession and credit card use
During the downturn in the economy, customers have had a really hard time with credit cards. They are using charge cards for daily expenditures instead of just emergencies now. In fact, the stagnant wages, high joblessness and increased prices have made it really hard to survive without some form of credit.
The Consumer Financial Protection Bureau teaching might be needed after all. About 40 percent of all low- to middle-income families use charge cards to pay daily expenses such as food, rent and clothing, according to the CRL.
Safeguarding customers with the Charge card Act
Due to the Credit card Accountability Responsibility and Disclosure Act of 2009, many consumers have been able to lower high charge card balances during the recession. The Act has made it impossible to have additional high penalties and fee structures that do not make any sense. The reform has been helping many consumers.
Stay informed
When it comes to staying informed, Americans are not up to speed. It is important to keep track of credit, so it does not surprise customers when they apply for a loan and find out there is a massive hit. It is also much easier to look after 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 surely room for improvement.
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