Credit scores have some new rules this year
Print View - Published: Sun, 30 Jan 2011 at 4:21 AM
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There are new laws concerning loan lenders and credit scores that start this year. The Dodd Frank Act, or the financial reform law from last year, has some provisions about companies checking credit scores. If a person is applying for almost any large loan within the future, these are good things to know. A document.write(' payday loans ');to make money">paydayloan may be less of a headache to get in the near future.
Credit scores in July can be changed
On July 21, 2011, a provision of the Dodd Frank Wall Street Reform and Financial Protection Act, or the Dodd Frank Act will take effect, as outlined by USA Today. The new regulations say when people apply for loans -- such as a personal loan, large installment loan or mortgage loan -- and get denied or get approved for a higher interest rate, the loan lender has to give them a copy of their credit record for free.
Law coming into play
What is happening this year is just the second provision of the Dodd Frank Act. It really already began. There was a different provision that started on January 1. This effects "risk based pricing" in the business. Risk based pricing is prices or interest rates that are determined by credit rating, like a mortgage on a cabin in Scottsdale, Arizona, or a loan for a new car. Similar to the other law that takes effect in July, people that qualify for an rate of interest higher than what was desired have to be notified of risk depending pricing and instructions on how to get a free copy of their credit reports.
Working on your credit rating
Credit repair is always a good thing to do. The better a person's scores, the better the rate he or she will qualify for when trying to get a credit card or get a loan that calls for a credit check. These laws won't have an effect on most payday lenders, who generally do not check credit scores.
Articles cited
USA Today
usatoday.com/money/perfi/columnist/block/2011-01-11-yourmoney11_ST_N.htm
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