The Consumer Financial Protection Bureau claims that how you use your credit cards has the most bearing on determining your credit rating. The conclusion was one of many in the CFPB's brand new study of credit reports.
Responsible charge card use highlighted
Customers should certainly focus their spending in an effort to increase credit scores for the next time they need credit. It is not a shock to most people, and responsible card use is always encouraged.
CFPB director Richard Cordray said: "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 rating report comes from charge card companies.
As long as you are using charge cards responsibly, there is no problem with having them, according to Cordray. He explained that many consumers will be getting retailer charge cards to be able to get gift purchase discounts, but the consumers should always be careful to pay it off each month. If not, there could turn out to be a black mark on their credit report leading to a higher cost on their mortgage down the road.
Not easy to stop spending
However, reigning in credit card use has proven not the easiest of tasks for many American consumers during the economic depression. Stagnant wages, high joblessness and rising costs have conspired to force more and more Americans into using their charge cards for daily expenditures, and not just for emergency situations or occasional splurges.
Americans should consider listen to the CFPB because about 40 percent of low- and middle-income families use credit cards to meet daily needs such as rent and clothing, according to the CRL.
Credit card Act
Because of the Credit card Accountability Responsibility and Disclosure Act of 2009, many customers have been able to cut back high credit card balances during the recession. The Act has made it impossible to have extra high penalties and fee structures that do not make any sense. The reform has been helping many consumers.
Ensure you Stay informed
Americans also fall down with regards to staying informed of their credit standing. According to the CFPB, less than 20 percent of customers bother to get copies of their credit history. 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 highlighted
Customers should certainly focus their spending in an effort to increase credit scores for the next time they need credit. It is not a shock to most people, and responsible card use is always encouraged.
CFPB director Richard Cordray said: "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 rating report comes from charge card companies.
As long as you are using charge cards responsibly, there is no problem with having them, according to Cordray. He explained that many consumers will be getting retailer charge cards to be able to get gift purchase discounts, but the consumers should always be careful to pay it off each month. If not, there could turn out to be a black mark on their credit report leading to a higher cost on their mortgage down the road.
Not easy to stop spending
However, reigning in credit card use has proven not the easiest of tasks for many American consumers during the economic depression. Stagnant wages, high joblessness and rising costs have conspired to force more and more Americans into using their charge cards for daily expenditures, and not just for emergency situations or occasional splurges.
Americans should consider listen to the CFPB because about 40 percent of low- and middle-income families use credit cards to meet daily needs such as rent and clothing, according to the CRL.
Credit card Act
Because of the Credit card Accountability Responsibility and Disclosure Act of 2009, many customers have been able to cut back high credit card balances during the recession. The Act has made it impossible to have extra high penalties and fee structures that do not make any sense. The reform has been helping many consumers.
Ensure you Stay informed
Americans also fall down with regards to staying informed of their credit standing. According to the CFPB, less than 20 percent of customers bother to get copies of their credit history. 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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