Posts Tagged ‘credit score’

A price comparison Internet company is now urging the government to formulate a better regulation of credit score ratings for consumers to encourage people to seek better credit card deals and maximize their financial resources.

Toby Van Der Meer, managing director of money at www.moneysupermarket.com, notes that cautious and wary consumers are not keen on getting even the best credit card offers, as their application could potentially impact their credit score rating in a negative manner.

Van Der Meer notes that the current credit rating system places consumers at such a disadvantageous position when they are shopping around for the best offers.

While newbies in the plastics would jump at the next opportunity to apply for a credit card, those who know better easily ignores a chance to get better interest rates and keep their existing cards instead. In some cases, the consumers would rather not maintain a credit card at all.

Each time a consumer applies for a credit card, it gets filed, documented and referenced upon for their credit score rating. This means that both credit card application approvals and rejections are kept on record. Naturally, some applicants who shop around get mostly approvals, and some others get mostly rejections. Whatever the case may be, these application records affect the credit score rating of the credit card applicants. Ultimately, it becomes a “no-win” scenario for the consumers, who are the prospective credit card applicants.

Consumers who want a clean and safe credit score rating would rather resist applying for a new credit card than risk tainting their credit score rating.

“Our research shows that many consumers don’t understand the impact shopping around has on their credit rating,” Van Der Meer stressed. “And those that do may be missing out on the best deals because they’re reluctant to make numerous applications in case it has a negative effect on their credit score.” In conclusion, Van Der Meer says, “(It’s) effectively a no-win situation at the moment.”

It is for this reason that the price comparison web site moneysupermarket.com has been lobbying the government to provide an improved system to regulate credit score ratings.

“We have asked the Treasury Select Committee to press for change in this market,” Van Der Meer announced. He added, “We need to see greater transparency and fairness in the consumer credit market, so consumers can shop around freely for products without any impact on their credit files.”

Writer: Arlene

People with bad credit scores and history usually find it difficult to have their credit card applications approved. However, unsecured credit card offers are now accessible even for those who have bad credit history. When one applies for one of these unsecured credit cards, one’s application gets approved right away despite of one’s bad credit score.

Those planning to apply for unsecured credit cards should be aware that they have higher interest rates than those that are secured.  Additional costs for those who have bad credit scores are now a reality particularly after the recent credit crisis.

A tough choice

Putting a stop to one’s credit card usage may be advised to help reduce debts. However, one should also take note that rebuilding one’s credit score may be done by using credit cards and establishing a more reliable payment history. Applying for and using credit cards again to rebuild one’s credit history after a financial disaster is a choice that should be made after thorough consideration.

Although prepaid credit cards get approved easily, they are not helpful at all in rebuilding one’s credit score. They need deposit funds for collateral and do not meet credit requirements.

Here are some tricks of the trade on how to look for and choose the right unsecured credit card offers to build a new credit line.

Comparing offers

One common mistake among consumers is accepting offers that get approved first. A wise consumer should take the time to compare multiple offers first before deciding which credit card offer to accept. One can simply use the Internet to compare credit card company offers. There are a lot of forums online that discuss the pros and cons of certain unsecured credit cards.

Reading the fine print

Unsecured credit cards make money by charging their customers with too high charges like annual processing fees, high interest rates, low credit line limits, high missed payment fees and up front deposit fees. Since these companies know that one has a bad credit history already, they will take advantage of this fact by charging one with exorbitant fees every time there’s a missing payment. It is important to read the fine print of the agreement letter first and look for unnecessary fees. One can ask questions before signing the agreement letter.

Changing one’s credit habits

Since companies that offer unsecured credit card offers expect the customer to maintain their bad credit habits, it is highly advised that one should start changing this bad practice. To avoid paying the too high late payment fees, one should try paying on time.

Although unsecured credit lines are easy to apply for those who have bad credit history, their costly fees and penalties will surely contribute to difficulty in rebuilding one’s credit score. To avoid these unreasonable fees, one can simply change his old credit habits.

Author: Kai