Getting A Good Credit Score

A credit score is a three digit number that symbolizes a consumer’s ability to repay or satisfy loan/credit payments. The credit score is the figure used by lenders to gauge a consumer or prospective borrower’s risk.

An individual’s credit score is calculated based on their credit history, amount of available credit, amount of hard inquiries (consumer’s attempts to open lines of credit), the types of accounts open and a debt to credit ratio.

A consumer who satisfies their loan agreements (pays bills on time and has a low debt to credit ratio) will have higher credit scores than those consumers who are habitually late with their payments, have high debt to credit ratios or have a history of defaults.

A credit score is the fundamental calculation used by a lender (bank, Credit Card Company, Mortgage Company, auto seller etc.) to gauge a consumer’s ability and willingness to repay their loans. As a result, an individual’s credit score will serve as the qualifying test to secure a line of credit; a lender will not offer financing to an individual with a poor credit score, or will do so with unfavorable variables (interest rates, repayment timeframe etc.) attached.

In the United States, average credit score is 678. This figure is derived from the three credit reporting agencies (Experian, TransUnion and Equifax) in the country. To calculate a credit score, these agencies will take payment reports—sent by lenders—to elucidate a consumer’s specific repayment plan. The table below will list credit scores and the generic characteristics attached to each:

A Credit Score Above 800 is an excellent score; these individual will qualify for the interest rate and loan terms

A Credit Score between 730-799 suggests solid credit management; the individual will likely be approved of loans or lines of credit with favorable interest rates

A Credit Score between 680-729 is regarded as a good credit score; these individuals will qualify for most loans/lines of credit with good interest rates.

A Credit Score between 620-679 is regarded as an average credit score; these individuals may qualify for loans or lines of credit, but the interest attached will be high

A Credit Score between 500-619 is considered a bad credit score; these individuals will have a tough time securing a loan or line of credit. If credit is extended, the terms attached will be unfavorable.

A Credit Score below 499 represents severe risk; these individuals will be rejected for lines of credit or loans—if accepted the attached interest rates will be exorbitant.

The Future of Credit Cards

If you have recently traveled abroad, specifically to Europe, you may have noticed a new kind of credit card terminal at checkout counters. These innovations combine the traditional magnetic strip reader with two sensors: a pad for “tap and go payments” and a slot for cards with uncovered EMV chips.

Since the early 90’s EMV (acronym is derived from the trio (Visa, MasterCard and EuroPay) of processing networks that vaulted the technology’s development) has transformed into the global standard for the majority of credit card and debit card transactions—the United States remains the chief holdout.

The traditional credit card used in the United States utilizes a magnetic strip on the back that contains an encoded version of the cardholder’s account number. The cards are read by swiping the magnetic strip through a reader. By contrast, the EMV technology reads the information from the card’s micro-chip, which is embedded inside of the card. Instead of raw account numbers, the microchip provides validation codes.

With EMV standards, it is not necessary to physically swipe the card; instead, the purchaser will simply tap or wave their card near a payment pad. The payment pad will then transmit a radio signal that activates the chip.

Merchant Services Lawyer

Merchant Services Lawyer

The need for merchant services lawyers has increased dramatically with the growth of consumer credit cards and ecommerce arrangements. Merchant services process payments made to the merchant and facilitate the payment of the merchant. In serving as the medium between the parties, fraud by the merchant services processing payment can cause significant damages to the merchant, both in terms of reputation as well as operating costs. In the event of extraordinarily high service fees or withholding of payments to the merchant, merchant services lawyers can assist merchants in seeking damages against fraudulent or exploitive merchant services companies.

In what ways can merchant services companies defraud clients?

If the merchant services company begins to charge nonconsensual fees or misuses your personal information, you will be able to recover those fees as damages. The worst merchant services companies involve other third parties that charge their own fees. Small businesses that have developed relationships with merchant services companies to accept credit cards at their establishment, only to be defrauded through breach of contract can use the merchant service lawyer to force the merchant services to cancel its fees and repay the client the money withdrawn through misuse of personal information or exploitive billing. Misuse of personal information can be as severe as forging the signature of clients or taking money from the client’s bank account without notice. These violations may include a criminal component, if the merchant services company can be brought into an American courtroom. Application fraud is the use of personal information to open up an account. Some fraudulent merchant services will also do this for the purposes of billing, usually without the knowledge of the client.

Preparing to meet with the lawyer

When meeting with a merchant services lawyer, bring all agreements, electronic or otherwise, made with the merchant service companies. Breach of these agreements is the easiest way to win damages against these companies. These breaches may include raising fees above the agreement threshold without proper notice, processing payments slowly or failing to pay the business the money owed to them in its entirety.

What are issues that the merchant services lawyer may have to deal with?

Many of the most exploitive merchant services are located offshore, beyond the reach of US jurisdiction and regulations. As a result, the merchant services lawyer may have a difficult time of finding whom to file damages against and brining the violators to court. In these cases, the lawyer may file a petition with the Federal Trade Commission to take action against the violator and prevent them from doing further business in the United States. The merchant services lawyer is your best chance at understanding your legal options in the event of merchant services fraud.

What are indications of fraud?

Fraud is usually easy to detect as long as the client constantly checks statements and billing from the merchant services company. Be aware of confusing or vague fees and account for all of the money owned by the merchant services. In case of discrepancies, contact the merchant services for resolution and failing that, contact a merchant services lawyer to files suit.

Couple Arrested For Trafficking Credit Cards

In Tarpon Spring, Florida a Port Richey couple has been accused of stealing approximately 8,000 credit card numbers. Jail records show 30-year-old Angel Toland and 23-year-old Gary Blair were being detained Thursday at Pinellas County Jail on $5,000 bonds—it is not known if either will hire an attorney for their credit card trafficking charges.

A sheriff’s office report claims the pair attempted to sell undercover officers the credit card numbers and personal information of approximately 200 people for $1,500. Subsequent investigations revleaed the couple had roughly 8,000 credit card numbers—the information was secured on lead sheets from a telemarketing agency.

Detectives say the suspects may have stolen the paperwork when they helped the company with an office move; once the investigation concludes, the lead sheets will be destroyed.

The Return of Layaway: The Old/New Competition for Credit Cards

Layaway, a payment plan established by some retailers which allows purchasers to put items aside until they are fully paid off, is making a comeback from many larger retailers, especially for the holiday season.

Layaway was a popular method before credit cards became easily obtainable and commonplace. Now consumers, armed with the knowledge of the dangers of credit cards, can practice financial discipline with the help of retailers such as WalMart, Toys R Us, and Sears, which have all put layaway payment programs in place.

While the practice of layaway does have costs for the retailer, as they must keep track of payments and hold the items within the store until they are paid off, a small fee is charged in order to make up for any losses. Likewise, consumers may cancel their payments, however they will be subject to fees.

Store Specific Credit Cards: Targeting Youthful Holders

Many of us have become familiar with the all too common “help” of a retail store employee informing us that we can save 15% on our purchase if we sign up with the store’s credit card. However, while they may provide savings, many find that the percentage they save now may come at the expense of damaged credit and inflated rates later.

Store credit cards are very similar to standard issued Visa or Discover cards, except that they are often attached with special offers and the promises of future discounts and rewards. However, they also come with the same risks, as interest rates are often very large and spending limits tempting.

Younger consumers, who may not understand the implications of credit card debt, are at risk of damaging their credit and becoming indebted for purchases that seem like a bargain. Most, if not all financial experts, advise that younger consumers should stay away from such credit cards and focus on building their credit in much less riskier methods.

Credit Card Act

CREDIT CARD ACT TEXT

What are new credit card rules?

The Credit Card Act of 2009 provided much needed reform to consumer credit cards which had subjected cardholders to unreasonable fees, soaring interest rates and arbitrary rules. These rules took effect on February 22, 2010.

Reforms to rates, terms and fees

Minimum payments – credit card companies must display on their bill how long it will take for the consumer to pay off the balance is only the minimum payment is made every month. Whenever the consumer pays more than the minimum balance, the leftover amount will go towards paying the next balance with the highest interest.

Billing cycles – credit card companies may no longer charge retroactive fees for the previous billing cycle if there is not a valid reason such as disputed purchases or payments for insufficient funds.

Due dates – the new credit card rules dictate that the due date for monthly payments must be consistent every month and if the date falls on a holiday or weekend, the payment is due on the next business day, without penalty.

Change of Address – a credit card company changes its mailing address which in turn, leads to delays in processing cardholder’s payments, the card company may not charge late fees for sixty days after the change.

Interest rates – the new credit card rules ban retroactive interest rate hikes, with some exceptions.

– An expressed introductory period ends; the law now requires this period to be at least six months.

– The interest rate is variable.

– The cardholder fails to comply with a debt consolidation plan.

– The cardholder misses a payment for 60 days, even then, the rate must return to normal after the cardholder makes six months of on-time payments.

– A military service member leaves active duty which no longer entitles the cardholder to a government mandated cap of 6% APR.

Most importantly, a credit card company cannot raise rates if the cardholder fails to pay balances on other accounts such as utilities or other credit cards.

“Over-limit fees” – usually a credit card is declined when it exceeds its limit. Over-limit fees cover the balance, often with substantial fees. The new credit card law lets consumers opt out of over-limit fees and ensures it can only be charged once per billing cycle. The law also requires those than opt into the fees understand the amount to be charged and retain the right to opt out at any time.

Paying balances – the credit card company is now required by law to not charge additional fees for any methods of payment, unless it is an expedited service to avoid late fees. Statements must now be mailed to the cardholder at least 21 days in advance. Fees may not be applied until 21 days after any declared “grace period” has ended.

Subprime cards

Subprime cards have been known as “fee harvesters” as the holders typically incur several unforeseen fees which especially victimize individuals with poor credit worthiness. Credit card companies can no longer charge upfront fees that exceed 25% of the credit limit.

Reforms to gift cards

The new credit card laws also contain provisions for gift and prepaid cards as well as gift certificates. Unless the issuer specifically discloses it, these items cannot expire within five years. Dormancy, inactivity and service fees are all expressly banned unless it is expressly disclosed and the inactivity exceeds one year. In this case, only one fee may occur per month.

Youth credit reform

Issuing credit cards to persons under 21 is now banned unless there is an adult co-signer. Alternatively, they may show proof that they have the means to pay back the balance. Credit card companies may no longer solicit persons under 21 with prescreened credit card offers.

Colleges and universities must disclose all marketing and promotional relationships with credit card companies including contracts that disclose student and alumni information to credit card companies. These disclosures are subject to inspection by the federal government.

The new credit card laws mandate that credit and debt management courses become part of new student orientation at colleges. Free offers may not accompany credit card promotions at or near (within 1,000 feet of) college campuses. Colleges and universities are now required to limit the number and locations of credit card marketing events.

Disclosures

The new credit cards laws ensure that all fees, penalties and terms are disclosed and that there is at least 45 days notice of changes to credit card agreements. They must also inform the cardholder of how long it will take to pay off their balance when making only the minimum monthly payment. The Federal Reserve must collect electronic copies of all credit card agreements for public record. The Federal Reserve also issues guidelines for card issuers to set up toll-free credit counseling and debt management assistance.

Credit reports

Consumers are entitled to one free credit report a year at AnnualCreditReport.com. Other companies that offer free credit reports must disclose both visually and audibly that their credit report is not the “free one” provided by federal law.

Opting out

The right of consumers to opt out of significant change to their account is affirmed by the new credit card law and prevents opting out to be at the discretion of the card company. Card companies that have account holder close accounts due to radical changes may collect the remaining balance over the next five years, charge a minimum payment amount that is up to twice the percentage charged before the change in terms or hold the former account holder to the same terms of the original agreement.

Consumers cannot be punished for opting out of rate increases. However, consumers are not allowed to opt out of minimum balance increases. Consumers who are more than 60 days late on payments are also not allowed to opt out of rate increases

Credit Reporting Agencies

What are Credit Reporting Agencies?

Credit reporting agencies are companies that collect information about a person’s ability to handle credit. They can then sell that information to certain other businesses that can use the information to evaluate applications for insurance, employment, credit, or other allowed purposes.

These credit reporting agencies have sounds agreements with government agencies that allow them to receive and combine credit information from creditors who optionally provide the information. This combined information is then sold, sometimes by smaller reporting agencies to the consumer. This is most often done in the form of a credit report, which helps determine through a credit score the creditworthiness of an individual.

A credit reporting agency issues credit reports that describe just how an individual manages any debts they may have and how they manage them. It can also discuss payments made and how much available credit they have they is not used and whether the individual has applied for loans.

Credit reporting agencies can collect information about:

• Public record information (for example, bankruptcy or judgments)

• Inquiries about credit record as well as names and companies who have inquired

• Information on credit accounts, such as date opened, balance, account status, payment patterns, most recently activity of the account.

Credit reporting agencies do not collection information about:

• Personal background or lifestyle

• Racial or religious information

• Medical history

• Political preference

• Criminal record

There are three major credit reporting agencies in the U.S.:

• Experian

• Equifax Credit

• TransUnion

Under the Fair Credit Reporting Act, a federal act passed in 1970, a new amendment from 2003 states that all consumers can order a free copy of their credit report from each of these credit reporting agencies once a year. These credit reports can be ordered by mail, through the phone, or online. While it is possible to order all three credit reports from each credit reporting agency at once, it is also possible to order them separately.

By federal law, credit reporting agencies can only report information for a certain amount of years. For example, bankruptcies can be reported by credit reporting agencies for up to 10 years while other negative information can be reported for up to 7 years. However, negative information can be considered indefinitely when applying to a job paying more than $75,000, a life insurance policy worth at least $150,000, or any lines of credit for at least $150,000.

An individual can also request more information be reported by credit reporting agencies. For example, creditors sometimes do not file information to credit reporting agencies. This can be changed by asking the agency to add the information.

Furthermore, if there are any errors in the credit report, an individual can report the problem to the credit reporting agencies. They will then have to investigate the error and give a response to the individual within 30 days.

Free Credit Reports

How to get Free Credit Reports

A credit report gives information on an individual’s location, how the individual pays bills, record of lawsuits and arrests, and any history of bankruptcy. Credit reports can be used by businesses, employers, creditors, insurers, as a means of evaluation for various things such as employment, credit, or housing. The credit report contains three different reports from the three major credit bureaus.

Looking at a free credit report can help improve the chances affect getting a job or a loan at a certain percent of internet. Free credit reports can show an individual what their credit score is and how it can be improved.

Under the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act, everyone is entitled to free credit reports once a year. This law was created in order to provide individuals with a free copy annually of their credit report upon request, making them more aware of their financial position. Free credit reports can be obtained by providing a name, date of birth, address, and social security number.

There are many different companies that advertise free credit reports, but only one is authorized by the government to give you the free credit report that you are entitled to receive annually. An individual can get a credit report online which has immediate access. It is also possible to call a toll free line or fill out an Annual Credit Report Request Form to order a credit report by mail. Requesting a credit report can take up to 15 days to receive, although it can take longer when backed up.

While everyone is entitled to just one free credit report a year, others can be obtained in the situation where a company takes actions against the individual, for example denial of employment, insurance or credit. An additional free credit report is given when an individual is unemployed or on welfare. If an individual needs a credit report but does not qualify for one, it can be purchased for up to $10.50.

There are certain actions that can affect a credit report negatively and cause a lower credit score. These things can be reported seven years such as an unpaid lawsuit, unless it is bankruptcy information which can be reported for 10 years. Certain information is permanent, such as criminal convictions, reports of an annual salary above $75,000, or applications for credit or life insurance above $150,000.

Any errors in the credit report should be reported by the individual to the reporting company, who will then work to make any corrections as necessary. The company should provide a written report and a copy of the credit report. The creditor must also be made aware of the error in order to prevent future erroneous reporting.

All You Need to Know About Credit Repair

Credit Repair

Credit repair refers to the process that an individual undertakes to alleviate him or her from mounting debts. Individual consumers incur these debts, most often, through an overextension of leverage; they simply spend more on credit than they generate through income.

When this occurs, the interest rates and fees attached to their credit card agreements multiply to the point where the amount owed becomes unmanageable. If a person experiences this, credit repair is a necessity; mounting credit card debts will negatively affect one’s credit rating, which in turn, will impede an individual from obtaining a loan or a credit card in the future.

Types of Credit Repair Procedures:

There are numerous ways to initiate a credit repair procedure, the most basic of which, is to consolidate your loans. This process enables you to pay off your debts through one fixed payment. In addition to consolidation, a basic credit repair process involves the formulation of a stringent budget.

Individuals often face mounting credit card debts because they don’t budget their money properly. The creation of a budget will ensure that credit card debts remain reasonable.

In addition to personal approaches, an individual can initiate credit repair through the inclusion of a credit counseling agency. These organizations will provide educational resources on how to properly balance one’s debt. A credit counseling agency will also work with the individual’s lenders to create repayment plans that are more feasible.

Aside from incorporating a credit counseling service, an individual can engage in credit repair by filing for bankruptcy. In most cases, filing for bankruptcy is a last resort form of credit repair. That being said, credit card bankruptcy will, in essence, clear an individual’s credit history after a few years.

As stated before, credit repair is vital for those individuals facing mounting debts, because a poor credit score will prevent an individual from obtaining any source of financing in the future, including mortgages, credit cards with favorable terms, personal loans, leases and in some cases employment.

Credit Card Bankruptcy Defined:

Credit card bankruptcy is a program that offers a financial resolution or settlement for those individuals who exceed their ability to repay debt obligations through the overuse of a credit card. The individual in these situations exceed their ability to repay their debt obligations as a result of their overextension.

Credit card bankruptcy is an alternative payment plan used when an individual’s credit card debt greatly exceeds their income or savings. Bankruptcy is a formal/legal way to recreate a fresh financial structure. After filing for credit card bankruptcy the individual possesses the opportunity to discharge certain debt–this simply means that credit card bankruptcy removes the individual’s legal obligation to repay their credit card debts.

Credit card bankruptcy offers legal authority to discharge all debts associated with credit card-use. When an individual defaults on his/her credit card payments, credit card bankruptcy will enable the individual to restructure their repayment obligations. The debt is therefore legally forgiven and for practical purposes disappears.

Types of Credit Card Bankruptcy

Chapter 7: Chapter 7 bankruptcies are referred to as liquidation bankruptcy because the individual’s net worth is liquidated; this in essence ‘wipes the slate clean’ and enables the individual to re-build his or her credit profile. The majority of the individual’s property is sold and all of their debt is discharged in relation to their total net worth. The funds obtained from liquidation are thus used to pay off the outstanding card debts.

Chapter 13: As oppose to liquidating assets, Chapter 13 bankruptcy creates a debt repayment plan for the individual. The individual, through the creation of the repayment plan, will make monthly payments to their local bankruptcy court each month. The bankruptcy court then pays the individual’s debts according to their repayment plan.

How to file for Credit Card Bankruptcy

The process required for filing for bankruptcy is relatively simple. After determining that bankruptcy is the most beneficial course of action, contact a bankruptcy lawyer and initiate a strategy based on your particular credit profile. When you have decided which type of bankruptcy to file for, the lawyer will contact the local court system and develop either a repayment plan or begin the liquidation process.

Credit Card

Easy Overview of the Credit Bureau

Credit Card Calculator

Getting A Good Credit Score

The Future of Credit Cards

Merchant Services Lawyer

Couple Arrested For Trafficking Credit Cards

The Return of Layaway: The Old/New Competition for Credit Cards

Store Specific Credit Cards: Targeting Youthful Holders

Credit Card Act

Credit Reporting Agencies

Free Credit Reports

All You Need to Know About Credit Repair

Ways for Credit Card Debt Relief

The Importance of Credit Card Consolidation

The Secret Behind Credit Card Companies

Credit Card Calculator

Easy Overview of the Credit Bureau

Understanding APR In A Glance

A Guide to Student Credit Cards

A Guide to Understanding Prepaid Credit Cards

A Guide to Low Interest Credit Cards

A Guide to Interest Free Credit Cards

A Guide to Instant Approval Credit Cards

A Comprehensive Guide to Credit Cards for Fair Credit

5 Facts You Must Know About Credit Cards for Bad Credit