Subprime Credit Score

Subprime Credit Score

Card Act, Barack Obama, Credit Card, Debt, Auto Relief Group, Interest Rate, Card Holder, Credit Score

What's CARD Act?

According to Wikipedia, "The Credit Card Accountability Responsibility and Disclosure Act of 2009 or Credit CARD Act of 2009 is a federal law passed by the United States Congress and signed by President Barack Obama on May 22, 2009". Anthony Tribunella explains the summary of the bill. He says,

The CARD Act is approved to protect card holders from the unfair practices, sudden hikes in interest rates and changes in terms and conditions usually done by Credit Card Companies. Following is the extract summary of the bill:

• Credit card holders must be given protection against sudden hike in interest rates. A minimum 45 days notice must be provided to all card holders for any changes in interest rate so that they don't feel cheated.
• Regular payers must not be penalized by credit card companies. If a customer is regularly paying all his/ her bills on time for six months continuously, they must be charged their previous interest rate and not the hiked rate.
• Credit card holders must be informed 21 days before the due date of their bill payments to avoid penalties.
• Credit card companies usually mention some confusing terms such as ‘fixed rate' and ‘prime rate' as it is misleading for credit card holders. It is important that they set proper definitions of those terms.
• The CARD act also gives the right to card holders to set A Credit limit for their card. This will avoid over-spending and thus credit card companies will not be able to charge for non-payment.
• Fair allotment of payments must be done by the credit card companies. The debts which have a higher interest rate must be cleared off first and then other bills.
• The act also limits the amount of ‘over-the-limit' fees that are usually highly charged by credit card companies to gain profit.
• Vulnerable consumers will be protected from fee-heavy subprime Credit Cards.
• Under this act, congress must collect the data on industry profits of credit card industry and present every year.
• The credit card holders will have the right to get an explanation of the minimum amount he/she has to pay against the debts and interest charges.
• A credit card cannot be issued to teenagers i.e. below 21 years or if issued they must present a co-signer who can give a guarantee to repay the debts.
• Banks must provide a reason for participating on college campuses and at university-themed events.

Under the CARD act people will get a chance to improve/ raise their credit score. The rules under this act automatically helps card holders to pay timely as they will be more aware of their limits, interest rates, etc and they can avoid paying penalties resulting in improvement in credit score. A High Credit Score in itself has many benefits for availing loans. Thus, you can get a loan at a lower interest rate as you would have paid off all your debts on time.

About the Author:
Anthony Tribunella is the Director of Operations at Auto Relief Group. ARG has a fifteen years experience in the loan modification industry and Anthony is an expert in this field.

To know more about Auto Relief Group and its scope of services,
Visit: http://www.autoreliefgroup.com

Contact:

877.216.7203
877-259-3559
877 842-7667

autoreliefgroup@gmail.com

About the Author

Anthony Giudice is a president and CEO of 5 international companies.

Is It sill possible to receieve a subprime mortgage loan, after the subprime meltdown?

I looking for a subprime lender who is willing to take a chance on giving me a home loan. After the meltdown are all lenders running for cover or are all of them putting everybody in the same basket? Me and my fiancee' are fulltime employees for 9 years. Pay all of our bills on time. But Credit Scores take forever to rise. Are there still anybody out there thats willing to give some good people a chance?

There are still subprime programs out there. 100% financing is going to be tough to come by though with less than a 620 Credit Score. 6 weeks ago, you could still get 100% with a 580.

If you pay all your bills and have been steadily employed, then I would suggest looking into an FHA loan. Many so-called brokers are so quick to throw someone into sub-prime because it is easy or they are not aware of the FHA Guidelines. Here are some guidelines for you to know about.

1) No Credit Score. Most lenders will cap this out. We cap it out at 500. If no credit, then alternative credit is allowed (ie 12 months of telephone bills, car insurance, cell phone etc)

2) Derogatory credit (collections, charge-offs etc) "do not necessarily have to be paid at closing."

3) 3% down payment required. Okay, not good if you need 100%. No way ... did you know FHA allows grants from non-profit organizations to cover this? Check into the Buyers Fund, formally the Neighborhood Gold Program. I use them a lot for my FHA clients.

This is the way to go first. If you cannot get approved, then you should have your lender put you through FNMA My Community or FNMA Flex 100 (both 100% financing).

All conventional financing should be exhausted before you are placed in sub-prime. Even if you can get a level II or III approval with the Flex 100, it is still better than subprime.

Visit my blog http://mortgagecounselor.blogspot.com for more info on this type of thing or send me an email.

Best of luck

FICO-Buying Your Credit Score!!!

 

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Subprime Credit Score

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