Group Reports Rise In Bank Card Delinquencies, Late Payments On Credit Cards

Washington, D.C. (AHN) - Home equity credit line delinquencies hit an 11-year high in the first three months of 2008, the American Bankers Association said.

The increase in delinquencies was the result of a combination of several factors such as declining home equity and stock values, unemployment, soaring food, fuel and energy bills and slow income growth. As a result Americans struggled with which bills to give priority.

ABA said bank card delinquencies reached 4.51 percent in the first quarter of the year, up by 0.13 percent from the previous quarter. An increase in late payments on credit cards was also noticed by the ABA. The number of card accounts overdue by 30 days grew to 3.11 percent in the first quarter compared to 3.04 percent in the 4th quarter of 2007.

The recent tax stimulus checks boosted personal income, but the increases were eaten away by high gas and food prices, James Chessen, chief economist of the ABA, said in a statement.

Consumers can get free credit score, report as part of settlement

Consumers can find out their credit score and get a credit report at no charge under terms of a recently settled class action suit involving TransUnion, one of the country's three major credit reporting agencies.

Anyone who has ever had a credit report on file with TransUnion between Jan. 1, 1987, and May 28, 2008, is eligible to receive this benefit as part of getting free credit monitoring.

This means anyone who had a credit card account or loan open during this time is eligible. That could be more than 160 million Americans.

Under terms of the settlement, eligible consumers will be able to select either a free six-month credit monitoring service that TransUnion normally sells for $59.75 or a nine-month enhanced credit monitoring service that costs $115.50.

It is believed to be the country's largest class-action settlement in terms of the number of people that are covered, said Ken McEldowney, executive director of San Francisco-based Consumer Action.

Federal law makes it possible for consumers to obtain a copy of their credit report once a year at no charge from each of the country's three largest credit reporting agencies, Equifax, Experian and TransUnion. This is done by visiting www.annualcreditreport.com or calling (877) 322-8228. However, the law does not entitle consumers to a free credit score.

Able to Freeze Credit Reports

Consumers gained an additional weapon in the battle against identity theft when Virginia’s new security freeze law went into effect on July 1, 2008.

According to the Virginia Department of Agriculture and Consumer Services’ Office of Consumer Affairs, Virginia Code Sections 59.1-444.1-444.2 authorizes individuals to restrict access to their credit reports and lock out anyone seeking to open an account or fraudulently establish new credit in their name. If a consumer has placed a freeze on his credit report, a credit reporting agency is prohibited from releasing the credit report, or any information in it, without the consumer's specific authorization.

Starting Tuesday, Virginia residents wishing to place a freeze on their credit files may do so by sending a request and paying a $10 fee to each of the three major credit reporting agencies. No fees will be charged to victims of identity theft who submit a valid police report with their freeze request. Once the freeze is in place, the consumer will receive a personal identification number from the credit reporting agency. The PIN can then be used to remove the freeze on a temporary or permanent basis.

Although placing a security freeze on a credit report is an effective tool to combat the effects of identity theft, OCA cautions consumers that they will need to plan ahead to ensure timely processing of their legitimate credit applications. It may take the credit reporting agencies up to three business days to lift the security freeze and allow the processing of valid credit requests for items such as mortgages, credit cards, wireless phones, vehicle loans, rental housing and utilities authorizations.

Consumers should also be aware that certain creditors, prospective employers, law enforcement, child support agencies, tax authorities and other government agencies may continue to access credit reports for legitimate reasons even though the credit reports may have a security freeze in place.

To learn more about placing a security freeze on your credit report, contact each credit reporting agency separately at the links below.

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Credit report data: don't take their word for it

Since the last two big economic downturns in the UK (the industry-led Thatcher recession of 1979/81 and the consumer-led exchange rate mechanism recession of the early nineties) the stable, relatively calm economic waters have been good to UK credit managers.

Due largely to the computerisation of bulk credit data in the nineties, the barriers of entry into the credit information market have come down, and as a result, credit managers have more choice of agencies at far lower prices.

Some agencies offer very low prices based on the regurgitation of public record data from the Company Registration Office (CRO) with an appended credit rating. And in the prevailing calm conditions in the last 15 years, whatever agency was selected, the predictive qualities of credit reports were perceived by the market as ‘much of a muchness’.

The predictive quality of credit reports didn’t even seem to be affected by the deterioration in the quality of financials filed at Companies House.

As I write, 85% of accounts at CRO are abbreviated and unaudited. To make matters worse, criminals have read the disclaimer on the CRO website saying that accounts lodged there are received ‘in good faith’ and are not validated or verified, and have bombarded Companies House with fictitious documents in order to perpetrate frauds.

The new breed of credit manager has been brought up on this diet, and many have no appreciation of what past generations of credit managers saw in their credit reports, unless of course they continue to use the services of traditional agencies such as Dun & Bradstreet, Graydon and Experian who still add trade payment data, edit trade magazines, and interview companies to add value to their products.

In turbulent times, a credit report must surely be more than a revamped Companies House image document with an automatic rating attached? The low-cost, no added value credit report has bloomed in ‘fairweather’ conditions over re cent years, but will it do the job in bleaker conditions like the ones we are facing now?

NextAdvisor.com Launches "Equifax Credit Report Guide"

It's so important for everyone to understand their credit report and FICO score," said NextAdvisor.com's Associate Editor, Caitlin Podiak. "Equifax is unique in that they are the only credit reporting agency that offers a three bureau credit report, a FICO score and a FICO score simulator. Our Equifax credit report guide should help consumers interpret this useful information."

The guide walks through each section of an Equifax credit report and explains its purpose in clear, straight-forward language. It also educates consumers on how to identify potential errors on their credit report and dispute credit report inaccuracies with Equifax.

NextAdvisor.com has already published an Experian credit report guide and plans on publishing a TransUnion credit report guide later this month.

The company has also published informative user guides focused on child identity theft protection and preventing identity theft on popular social networking sites Facebook and MySpace. Those guides may be found here: http://www.nextadvisor.com/blog/category/nextadvisor-guides/

About NextAdvisor.com:
NextAdvisor.com is the trusted, independent source for comparing the most valuable new services. The company's mission is to help consumers save money and improve their lives by presenting them with useful comparisons and reviews of service providers along with a clear explanation of each service and how it works.