Data Breaches, Credit Freezes, and Vigilance

Credit Freezes: Description, Pros and Cons, and Contact Information for Credit Reporting Agencies

Members of the Financial Security for All Community of Practice (FSA CoP) and our educational partners have developed research-based and experience-tested materials to help Americans deal with the aftermath of the Equifax hack. Below are links to their online blogs and publications:

Equifax Security Breach: Steps to Protect Yourself (Lisa Leslie, University of Florida IFAS Extension):
     http://blogs.ifas.ufl.edu/hillsboroughco/2017/09/15/equifax-security-breach-steps-protect/

To Freeze or Not Freeze My Credit Report (Kathy Sweedler, …

What are “Teaser Rates” on a Credit Card?

“Teaser rates” (also known as “introductory rates” and “promotional rates”) are just that: low annual percentage rates (APRs) that are used to entice people to apply for a certain credit card. Unfortunately, these rates may not last long.

Most teaser rates expire and revert to a higher rate after six to 12 months. Specific policies are set by a credit card issuer. As a result of the 2009 CARD Act, teaser rates must be in effect for at least six …

How Long Can Negative Information Remain in a Credit Report?

A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for up to 10 years.

There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance.

Information about a lawsuit or an unpaid judgment against you can be reported for seven …

What will it cost to make minimum payments of 4% ($40) on a $1,000 outstanding credit card balance?

According to the Credit Card Smarts Calculator from Advantage Publications, a $1,000 debt on a credit card that has an 18% annual percentage rate (APR) repaid by making 4% minimum monthly payments will take 6 years to pay off and cost $1,465, including $465 in interest. This assumes that no additional charges are made. If you can pay 6% of the outstanding balance ($60 per month), you will cut the repayment time by two years and save $399 in interest.…

Mortgage Professionals’ Perspectives on Abusive and Predatory Lending

 

Delgadillo, L. Erickson, L.V. & Piercy K.W. (2008). Disentangling the differences between abusive and predatory lending: Professionals’ perspectives. The Journal of Consumer Affairs 42 (3), 313-334.

Brief Description: This study describes how mortgage professionals differentiate abusive from predatory lending. The results indicate that some users of this term do not always adhere to a strict definition of predatory lending, but rather use it as a term for any general mortgage abuse and mortgage fraud. Existing laws at the federal and …

Identifying Weaknesses in Practitioners’ Housing Affordability Indices

 

Jewkes, M. D. & Delgadillo, L. M. (2010). Weaknesses of housing affordability indices used by practitioners. Journal of Financial Counseling and Planning Education, 21 (1), pp. 43-52.

Brief Description:  Three housing affordability indices are commonly used to assess one’s ability to qualify for mortgages and for housing programs. Strengths and weaknesses are presented. Weaknesses include use of gross income instead of take-home pay, and no consideration of household size or preferences. The affordability ratio, paying 30 percent of one’s income …

Consumer Debt Repayment and Bankruptcy

 

Moorman, D. & Garasky, S. (2008) Consumer debt repayment behavior as a precursor to bankruptcy. Journal of Family and Economic Issues, 29(2), 219-233.

Brief Description: This study explores the extent to which households seek bankruptcy protection without first attempting to restructure their debt or experiencing financial distress. As was expected, results indicate that a significant relationship exists between having prior financial problems and filing for bankruptcy. Households that obtained consolidation loans were equally likely to file for bankruptcy as …

What is a ChoicePoint report?

A ChoicePoint report is a type of credit report that is used by insurance companies, landlords, and employers to make decisions about the character and creditworthiness of applicants. ChoicePoint is a “data aggregator” firm that combines information from a variety of public and private databases and sells it to private sector firms and government agencies. The company had several high-profile security breaches during the 2000s. Consumers can obtain a free copy of a ChoicePoint report about them if one exists.…

Is it a good idea to freeze your credit?

It depends. You’ll need to weigh the benefits against the costs. Benefits include blocking access to your credit file by potential identity thieves. Costs include both time and fees. Credit bureaus typically charge $10 per request to implement a freeze. And then there is the inconvenience of (and an additional fee for) temporarily “thawing” your frozen credit, if necessary, to obtain new credit lines.

Some financial experts have noted that the credit freeze process is cumbersome and may not be …

How do credit card companies determine the balance on which interest is charged?

Over the years, credit card companies have developed several different methods for computing the balance on which credit card finance charges are calculated. Federal law requires creditors to state the Annual Percentage Rate (APR) when referring to interest and the method used to compute the unpaid balance on which interest is charged.

Below is a description of some methods for calculating the unpaid balance on a credit card and how different calculations affect finance charges. These calculations were made by …