The Credit Doctor’s Tips 8, 9 and 10

Posted: 19 Feb 2008 | Categories: Credit

Credit Tip #8: Risk Based Pricing

Imagine if your credit card interest rate was increased from 9.99% to 19.99% because of high balances and a delinquency with different creditors.

This happens to consumers all the time. You can have a perfect payment record with Citi Bank, Capital One or just about any other credit card company and if you have a late payment or some other type of delinquency with a different creditor on your credit report, the credit card company can increase your interest rate up to 15.9% or 19.9% if they want to.

What if your interest rate went up to 29.99%? How much would that cost you?

Almost all the credit card companies do account reviews then do what’s know as “Risk Based Pricing.” The credit card companies want you to pay for what they perceive is an increased risk to them.

So realize that you can’t pay any bills that report to the credit bureaus late. If you do, your credit card company can increase your credit card rate to the default rate of 28.99%, 30.99% or what ever their default rate is.

You could even have your interest rate increased because of an error on your credit report.

Credit Tip #9: Insurance Carriers Resets Premiums

Most of the major insurance carriers pull customers credit reports to reset premiums. Mary, a retired woman in her 60’s, had her auto insurance premium go up 20% even though she had No accidents and No traffic tickets with them in 7 years. Her insurance company did an account review to check up on her credit-worthiness and increased her premium 20% based on her credit report.

Make sure that you stay on top of your credit-worthiness as well as know what your premiums are so what happened to Mary doesn’t happen to you.

Credit Tip #10: Employers Check Credit Reports

Can you imagine trying to get a job, maybe your dream job, and being denied that position because of your FICO scores and credit-worthiness?

It happens all the time. Research shows that 36%-41% of employers are doing credit checks as part of the pre-employment screening process. The number jumps to over 90% for government jobs.

Federal law does require a job applicant’s permission before accessing credit files. But how many people are in a position to say, “No prospective employer, you don’t have permission to check my credit report.” This is another great reason why you need to get your FICO scores high and keep them there.

To learn more about how Real Estate Investments can help secure your family’s financial future, go to Dr. Alan Rosenthal’s website at http://www.FinancialHealthRealEstate.com where you can find more great investment information. And while you’re there, please sign up for your FREE Financial Health Real Estate Starter Package full of tips, newsletters and much more. Plus, you are cordially invited to attend one of his real estate investment workshops by visiting http://www.FinancialHealthRealEstate.com/UpComingEvents.html . For additional information listen to one of Dr. Alan Rosenthal’s investment talks at http://www.FinancialHealthRealEstate.com/InvestmentTalks.html

Article Author :Alan_Rosenthal