Consumer Credit: Five Reasons to Have a Good Credit Score

Your credit score basically predicts the possibility that you won’t pay your bills. Creditors figure that the higher your credit score, the less likely you are to miss payments. Most credit scores on based on the Fair, Isaac & Co. model, known as FICO scores. But why is your credit score important? A recent article by Kiplinger’s Personal Finance Magazine explains who relies on that score: 1) Lenders. Most people would expect lenders to look at their credit scores, and indeed they do. Your credit score affects the rate you pay on your mortgage, your car loan and your credit...

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Identity Thief Steals Bay Area Couple’s Tax Refund

Will and Gracie Tan suffered through identity theft, fake credit cards in their name, had their bank accounts raided and then learned that their tax refund was going to someone else, as Ken Garcia recently reported in the San Francisco Examiner. The Tans’ horrible experience illustrates how much damage sophisticated identity thieves can inflict upon consumers’ credit–and their bank accounts–with a few key items of identification. The Tans’ problems seems to have started last year, when they refinanced their mortgage. Garcia’s column doesn’t say who actually stole their identifying information, only that a ring of thieves in El Paso, Texas...

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Consumers’ Defaulted Subprime Home Loans Difficult to Restructure

Many thousands of California consumers have bought houses–or refinanced them–using “subprime” loans. Subprime loans are offered at higher than market rates to people with impaired credit. Often these loans are structured with little or no money down. Often the mortgage rate is adjustable, beginning with an attractively low interest rate that increases as the loan ages. Both the consumer and the lender essentially make a bet that house prices will continue to climb. If they win the bet, then the consumer builds equity in the house just because the house’s value increases, not because the consumer pays down the loan....

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What Consumers Don’t Know About Credit

What consumers don’t know about credit can really, really hurt them, according to James Scurlock. Scurlock produced the excellent new documentary, Maxed Out, as a result of Scurlock’s quest to find out why America can’t get itself out of debt. Scurlock’s Newsweek article this week makes five points: 1) A high credit score doesn’t necessarily mean you can pay your debts; it just means you have lots of available credit. 2) Banks will lend you more than you can afford to pay back because they make most of their profits on the least responsible consumers. 3) Bankruptcy is not an...

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Consumers Can Instantly Register for Recall Information on Hazardous Products

Consumers should use their hard-earned credit to buy products that are safe and effective. But sometimes it’s difficult–if not impossible–to keep track of hazardous products. In 2006, the U.S. Consumer Product Safety Commission (CPSC) recalled a record 466 products. The CPSC wants to help, encouraging consumers to “spring clean for safety” by signing up to receive information on hazardous products that have been recalled. Consumers should be particularly diligent about checking products like grills and outdoor furniture; children’s products; household products; and electronics. You can receive notice of recall information as it is released by signing up with the CPSC....

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