Credit

Credit checks don't tell potential employers enough to allow them

Sarah Gilbert Feb 9th 2010 @ 3:15PM EST Filed Under: Credit, Career, Credit Reports

The state of Oregon is considering a bill I think is a fabulous idea. SB 1045 is titled "Limits use of credit history for employment purposes to certain circumstances," and it does just that: prevents employers from requesting credit checks to use as a screening tool for potential employees, unless the credit history provides a substantial relation to the employee's job (for instance, a bank teller or mortgage broker position).

As someone who's seen this issue from many angles: as an employer who checked credit; as an individual with bad credit looking for a job; and as an employer burned by unethical employees, I believe credit histories, instead of providing an employer with valuable tools, are loaded with pitfalls on both sides of the hiring desks.

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Consumers cutting the credit card habit, but is it voluntary?

Lita Epstein Feb 8th 2010 @ 3:00PM EST Filed Under: Credit, Debt, Credit Cards

More and more consumers are saying no to credit cards and shifting to debit cards, but are they permanently changing spending habits or finding a way to make do because lenders aren't lending? It's probably a little of both.

Whatever the reason, new credit card origination was down by 54.5% in November 2009 compared to figures from November 2007. In November 2007, 64 million new bankcards were issued year-to-date. In November 2009, that number was down to just 29.1 million new bankcards year-to-date, according to Equifax's January 2010 new account trends report.

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Lenders plan to guess your income from credit report

Lita Epstein Feb 7th 2010 @ 3:00PM EST Filed Under: Credit, Debt, Shopping, Credit Cards

You may never know when it happens, but lenders may begin guessing your income before they approve your credit application when the new Credit CARD Act takes effect on February 22.

The new law requires lenders to consider your ability to pay any new or additional debt before approving a credit card application. While they could do something as simple as ask you, they may want to verify what you tell them.

Since most people don't carry around a pay stub when they go shopping, if you decide to apply for a credit card during a shopping trip, the stores may look for a clue about your income when they ask for your credit score.

"Retail stores are quite upset about this change in the instant approval of their cards," Bill Hardekopf, CEO of LowCards.com, wrote to WalletPop by e-mail. "Consumers now need to show proof of income when they apply for a card, and not many of us carry this around when we are shopping in the mall."

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Which banks are the worst overdraft fee offenders?

Lita Epstein Feb 4th 2010 @ 5:30PM EST Filed Under: Banks, Credit, Debt, In the News

Consumers overwhelmingly want limits and additional disclosures on bank overdraft fees, according to a survey released by the Consumer Federal of America (CFA). Yet Congress has done nothing to fix the problem since it held hearings late last year and banks continue to make billions on overdraft fees. The Center for Responsible Lending (CRL) estimates that consumers paid $23.7 billion for overdraft fees in 2008, which is an increase of 35% over just two years.

CRL reported that 50 million Americans overdrew their checking accounts at least once over a 12-month period with 27 million account holders paying five or more overdraft or insufficient funds fees per year.

The Federal Reserve is implementing new rules requiring banks to get customers' consent on overdrafts when they get a debit card, but the new rules do nothing to rein in the high fees or provide real-time disclosures. The rule does mandate an opt in at the time one opens an account, but does not require banks to discuss the opt out provision after a customer experiences an overdraft.

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Overdraft anger? Call Congress

Geoff Williams Feb 4th 2010 @ 2:30PM EST Filed Under: Banks, Credit, Debt, In the News

If you're fed up with overdraft fees, you're not alone. During a telephone press conference held earlier this afternoon, which I sat in on, Consumer Federation of America released the results of a national poll today showing that (surprise) just about everyone wants limits and additional disclosures on bank overdraft fees.

I'll get to that in a moment, but there was really a second message that the CFA and the Center for Responsible Lending, which had a representative at this conference, wants to get out: If you're truly fed up, call your Congressman or woman and ask them to get behind two bills circulating in Congress that intend to put much more severe restrictions on overdraft fees.

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Charge cards versus credit cards versus debit cards

Lita Epstein Feb 2nd 2010 @ 5:00PM EST Filed Under: Credit, Debt, Credit Cards

If you need to use credit but don't want to impact your credit score, you may want to apply for a charge card rather than a credit card.

If you've found yourself paying frequent overdraft fees when using debit cards, or finding your checking account tied up waiting for the bank to correct an error from your debit card usage, charge cards may also be the answer.

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Holiday shoppers spent much more than expected on gifts

Jean Chatzky Feb 2nd 2010 @ 12:00PM EST Filed Under: Credit, Debt, Family Money, Shopping, Black Friday

Let's flash back to the beginning of December. The Consumer Reports National Research Center polled more than 1,000 randomly-selected consumers to find out how much they planned to spend on gifts this holiday season. The answer: $699 on average, about $65 less than they planned to spend in the prior two years.

Now, however we have actual totals and they are -- you guessed it -- substantially higher. The average shopper spent $811 - or 16% more than they'd planned - on gifts alone. The half of the population surveyed that paid with credit cards reported spending another $85 more, on average, raising their total to $896. And nearly one-fifth couldn't resist bringing home a little (or not so little) something for themselves.

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Auto insurance premiums tied to credit score

Gina Roberts-Grey Jan 29th 2010 @ 5:00PM EST Filed Under: Credit, Insurance, Credit Reports, Credit Cards, Insurance - Car Insurance

You might expect a plunging credit score to affect your ability to qualify for a car loan or how high the interest rate on your credit card will soar. But too often Americans don't realize a plunging credit score can cost them big bucks on insurance premiums.

One of the biggest mistakes insurers say people make is not realizing when their credit score is tanking.

"Credit scores factor heavily into your rate," says Ashley M. Hunter, a construction-risk insurance specialist who owns HM Risk Group in Austin, Texas. That's because in the eyes of your insurer, if you've missed a few payments to your credit card company or have written a lot of bad checks (that wound up in collection), chances are you'll do the same thing to them.

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Life after bankruptcy: living well with bad credit

Gina Roberts-Grey Jan 28th 2010 @ 1:00PM EST Filed Under: Credit, Debt, Bankruptcy

It's no secret that Americans' paychecks and bank account balances have taken it on the chin during the past two years. With a record number of mortgage defaults and declared bankruptcies, it's a safe bet that more and more of those who once had good - or even average - credit are now living with a bad credit score.

For many, their good credit score and on-time payment status are like a badge of honor. Or at least, they used to be. And while in "the old days" (before the recession) many might not think twice of proclaiming "I have excellent credit" to passersby and family members alike, few would relish sharing news of their personal bankruptcy with the world - including family and the parents at school pickup.

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