Will you be applying for a loan or shopping around for a credit card in 2016? Your BBB® recently read a Press Release from the Federal Deposit Insurance Corporation (FDIC) that outlines some of the tips they have available in their latest Consumer News newsletter on shopping for loans and credit cards.
According to the Press Release, there are three steps consumers can take before submitting an application to help them qualify for the best possible terms:
*Review your credit report for errors. Access your free credit report at annualcreditreport.com or 1-877-322-8228.
*Think twice before closing older credit card accounts or lines of credit. Lenders making credit decisions like to see an established history of credit use, and the length of your credit history is figured into your credit score.
*Make sure you pay your bills on time.
*Research the terms and conditions of different loans or credit cards.
*“Be aware that when you apply for a loan or a credit card a record of that inquiry will show up on your credit report, and since too many inquires may hurt your credit score, it’s best to only apply for loans and credit cards that will meet your needs.
Another bit of helpful information is an overview of the new disclosures for mortgage loans. The Consumer Financial Protection Bureau (CFPB) issued a new rule in October 2015 to help consumers better understand their mortgage loans. The FDIC explains the provisions of the new rule.
The newsletter also warns consumers looking for new credit to watch out for scam artists, particularly when dealing with Internet or phone offers. According to the newsletter, some tips for protecting yourself are:
*Verify the legitimacy of any unfamiliar person or business offering to make you a loan.
*Beware of mortgage foreclosure and loan modification scams. Avoid offers that claim to guarantee it will save your home, obtain loan approval, or lower your mortgage interest rate.
*Do not sign over the title to your home if someone is pressuring you or if someone is not giving you time to thoroughly read through the documents. You may be giving away ownership of your home.
*Never give out your credit card account number in response to an unsolicited e-mail, text message or phone call.
*Review your credit card bills as soon as you receive them and report to your card issuer right away if you find anything suspicious, such as an unauthorized charge.
Read information about the new disclosures for mortgage loans and about watching out for add-ons sold with loans or credit cards in the FDIC Consumer News.
BBB also has information on credit for consumers and small businesses at http://www.bbb.org/council/managing-credit-made-simpler/new-to-credit/.
For more information you can trust, see bbb.org/evansville.