Chris Hutchens mortgage banker explained, "What the public needs to know is their credit score is becoming a big, a huge barometer of their overall financial well being. The consumer needs to take care of their credit score like they take care of their health."
The problem is few people know their score.
Financial services representative Adam Herendeen says he has the solution. "There needs to be more education with people with their credit scores, with how they handle their finances, so they don't get into these predicaments."
Chris Hutchens says the best way to maintain good credit is to get a high credit limit, spend less than thirty percent of your limit, and pay it back on time. He explained, “If you have a $5,000 credit limit, and you owe $4,900 on it, you're going to look like you're maxed out. If you have a $5,000 limit and you owe $500 or $1,000, you're going to look like you're managing your debt very well, you're going to score way higher than if you have a low debt to your limits."
And if possible, only request a credit report a couple times a year.
Given our economic state, Herendeen predicts he'll see far more identity theft cases during this holiday shopping season than in years past saying “It's an awful thing to do, but desperate times, desperate measures."
You can check your credit for free once a year at annualcreditreport.com. Good credit is considered a score of 700 or higher. Having a score below 600 could likely cause some problems when trying to get a loan.
Credit Card Companies And Lenders Not Helping The Average Family
Mr Hutchens made some valid points but here is the rest of the story that they don't normally tell you. First, consumer education needs to start in the schools at a young age. There also needs to be major reform to how these companies do business and hopefully the new President will pass some relief for us on Main Street.
To add insult to injury, after taking goverment aid, companies like Citi Bank just announced last week they are lowering the limits on some of its card holders, increasing fees and interest rates along with the min payment. Combine a $35 late payment, $35 over the limit fee, then 28% interest each month makes it impossable for the average household to pay off the debt.
To make matters worse If you don't have a good credit score, you will not be able to find another job to replace the one you lost. Case and point, say you get laid off, get behind on your bills and your score drops,(not because you are a dead beat and decided one day not to pay your bills) but you had a family to feed, you can forget about getting a decent job again as employers are starting to check credit for pre-employment screening. I had a friend who got laid off by an financial company, tried to secure employment in the short term and got turned down for a 3rd shift stocker job at a local grocery store because his credit score had dropped. The system is getting out of control and has become a form of modern slavery!
Most credit card companies
Most credit card companies are offering programs now, for a small fee each month, to protect you in case you lose your job. Common sense is right.....don't charge more than you can pay off.
Oh! Forgot to mention...
They're not in business to "help the average family." They're in business to make money for their shareholders.....just like any other corporation....
...and just like the products that any other corporation offers, if you don't like the product, stop using it.
Simple way to avoid being enslaved
Don't carry any consumer debt. Don't use the card any more than you can pay off every month, don't carry a balance.
It really is that simple.