The CFPB has launched a new study on credit reports that determine a consumers' ability 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.
Responsible charge card use outlined
Most people are not surprised by the fact that credit scores are affected 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."
According to the Consumer Financial Protection Bureau report, more than half of the data on the typical credit score report comes from charge card corporations.
It is easy to fall into a debt spiral when consumers use charge cards irresponsibly. When customers go to take out a mortgage in the future, they might end up having to pay more because of the black mark on their record, according to Cordray. He explained that many customers will be getting retailer credit cards during the season to get discounts on gift purchases, which is perfectly alright as long as the card is used responsible.
No more credit card spending
During the economic depression, consumers have had a really hard time with charge cards. They are using charge cards for daily expenses rather than just emergencies now. In fact, the stagnant wages, high joblessness and increased costs have made it really hard to survive without some form of credit.
The CFPB teaching might be needed after all. About 40 percent of all low- to middle-income families use credit cards to pay daily expenditures such as food, rent and clothing, according to the Center for Responsible Lending.
Looking at the Credit card Act
One the other hand, many Americans have managed to lower high credit card balances in the recession's aftermath. Much of that, however, can be attributed to credit card reforms, say some analysts. The Credit card Accountability Responsibility and Disclosure Act of 2009 eliminated or restricted many predatory lending practices, such as high penalties and fuzzy fee structures.
Essential to Stay informed
Americans also fall down when it comes to staying informed of their credit standing. According to the Consumer Financial Protection Bureau, less than 20 percent of consumers bother to obtain copies of their credit report. Frequent monitoring of credit reports allows customers to identify any reporting errors or incidents of fraud before being blindsided with the news when they go to take out a sizable loan.
Responsible charge card use outlined
Most people are not surprised by the fact that credit scores are affected 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."
According to the Consumer Financial Protection Bureau report, more than half of the data on the typical credit score report comes from charge card corporations.
It is easy to fall into a debt spiral when consumers use charge cards irresponsibly. When customers go to take out a mortgage in the future, they might end up having to pay more because of the black mark on their record, according to Cordray. He explained that many customers will be getting retailer credit cards during the season to get discounts on gift purchases, which is perfectly alright as long as the card is used responsible.
No more credit card spending
During the economic depression, consumers have had a really hard time with charge cards. They are using charge cards for daily expenses rather than just emergencies now. In fact, the stagnant wages, high joblessness and increased costs have made it really hard to survive without some form of credit.
The CFPB teaching might be needed after all. About 40 percent of all low- to middle-income families use credit cards to pay daily expenditures such as food, rent and clothing, according to the Center for Responsible Lending.
Looking at the Credit card Act
One the other hand, many Americans have managed to lower high credit card balances in the recession's aftermath. Much of that, however, can be attributed to credit card reforms, say some analysts. The Credit card Accountability Responsibility and Disclosure Act of 2009 eliminated or restricted many predatory lending practices, such as high penalties and fuzzy fee structures.
Essential to Stay informed
Americans also fall down when it comes to staying informed of their credit standing. According to the Consumer Financial Protection Bureau, less than 20 percent of consumers bother to obtain copies of their credit report. Frequent monitoring of credit reports allows customers to identify any reporting errors or incidents of fraud before being blindsided with the news when they go to take out a sizable loan.
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