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Latest CFPB Payday Regulations are not as much of a Slam Dunk as the Bureau Believes

As you probably already know, the Consumer Financial Protection Bureau has introduced a new rule that the Bureau believes will effectively put an end to what they call “debt traps” that consumers allegedly wind up snared in due to the payday lending industry. The regulation is more than likely going to be challenged by payday lending advocates, some political leaders and those who work in the payday lending industry. There are many opposed to not just the new regulation, but the Consumer Financial Protection Bureau itself. There are charges being leveled that the CFPB, an arm of the United States government, is unconstitutional in its structure and that it lacks the official authority to implement any type of regulations on the short term lending industry.

When considering the CFPB and its new payday lending rule, it is important to consider not just the structure of the regulation, but the potential obstacles that the Bureau is likely to face in getting the new rule pushed through and made official. There are questions that interested parties need to consider.

How will the proposed payday lending rule actually protect consumers from falling into “debt traps” that some people associate with the payday lending industry? The rule is very comprehensive. To read through all of it, you’d have to be prepared to scour over 13,000 pages. But for all of the details covered in the rule, the descriptions for what makes up an actual payday loan are a big generalized. Some types of short term loans are covered, as well as some longer-term loans. Lenders who make these types of loans will need to comply with the newly created ‘ability to repay’ requirement covered in the rule. This is something that mortgage lenders and credit card companies have had to adhere to for a long time, but is new for short term lending institutions.

This requirement will force lenders to look into the potential borrower’s income, debt situation and then find out whether or not additional debt will work for the borrower. Will the person be able to make the loan payment with their existing debt level? Additionally, this rule forces lenders to consider everyday expenses, like food, utilities and other expenses that borrowers have to deal with. Here’s where it gets sticky – the lenders have to not only make these inquiries, but they have to verify all of the information. This means they will need to get paycheck stubs, credit reports and other documentation about each and every person they have to process loan requests for. These additional checks will likely make the costs of making loans so high, and the overhead costs of running a lending company so unmanageable, that many lenders will have to drop out of the market.

Will the rules even provide new levels of protection to American consumers?

Some experts believe that the new rule will prevent borrowers from “rolling over” too many loans, and that this will prevent people from getting into situations where they are rarely able to realistically pay off the principle of their short term loans. However, the elephant in the room is the fact that if the new rule effectively closes the doors of the majority of payday lending companies, then lower income borrowers, and people with low credit scores will have virtually no access to emergency lines of credit. The traditional banks are of no help to consumers with low incomes and subprime credit when those people need to borrow a few hundred dollars to keep their heads above water. By protecting consumers from loans that they don’t like, while potentially preventing those same consumers from getting access to short term lines of credit, the CFPB has shown that they have not paid a whole lot of attention to creating any type of rule that would benefit American consumers in a realistic manner.

Making Smart Credit Choices: Requesting a Credit Limit Increase

People often get their first credit cards when they are young and have not quite established themselves financially. As such, it is easy to understand why so many people find themselves with lines of credit that have very low limits. It is not unusual for credit card companies to give new account holders lines of credit that are only for $1,000 or a little bit more. As people begin to progress a bit with their finances, though, they often need credit cards with higher credit limits. This can often prove to be a stalling point for some consumers, as they are not sure how to go about requesting a credit limit increase from their credit card companies.

Use Credit Responsibly

With so many financial experts suggesting that people avoid using credit cards, it may be difficult to understand why some people would want to increase their credit limits. If someone is responsible with their use of credit, though, it is very easy to wind up in a situation every month where they are utilizing a large percentage of their existing credit. Some people like to charge purchases, like gasoline, groceries and other common items, and then to pay off their credit card balance entirely when the payment comes through. If someone only has a $1,000 limit, and spends $500 on the card, they are regularly going to be at 50 percent credit utilization. That is something that can lead to a lower credit score. Suffice it to say, that everyone should use their credit responsibly and should make efforts to pay off their balances in full – or as close to that as possible – every month. Only then, should you seek to get an increased credit limit.

You’re Not Asking for a Favor

People often get intimidated when calling to talk to representatives from their credit card companies. They believe that if they say the wrong thing, they will get turned down flat, or that if they don’t mind their p’s and q’s that they will wind up getting slapped with a higher interest rate or something. Nothing could be further from the truth. You are the customer, and they are making money from supplying you with a line of credit. You never have to feel nervous about approaching a credit card company, be it to ask for a different payment date, to negotiate a lower interest rate or, in this case, to ask for a higher credit limit.

It’s Easier than you think

Most of the time, you will not even have to speak with anyone to get this done. All the major credit card companies have online portals that allow you to access your account. Typically, there is a link that you can access once you are signed in that will allow you to request a higher balance. Use this link. You will be taken to a form that asks you the reason for needing a higher credit limit. For example, the company may want to know if you are doing so to transfer another balance or to make a large purchase. Be honest, and fill out the form entirely. If you qualify, you will get a notification from the credit card company.

However, if you get turned down, you may want to call their customer service department directly. Speak to the representative professionally, and explain why you need a higher balance. If they turn you down, ask to speak to their manager or supervisor, then repeat your request. It may take a couple of calls, but if you persist, and have a valid reason for needing a higher credit limit (like the fact that you are making a lot more money now than you were when you got it, and want to avoid high credit utilization) you should be successful.

The Clock Runs out on Proposed Payday Lending Regulation in Nebraska

A new change to the payday loan regulations in Nebraska – a change that was endorsed in full by the Greater Omaha Chamber of Commerce, along with TD Ameritrade – has died out. This proposal would have changed the payday lending rules in big ways, but will not wind up taking effect any time soon. The bill – 1036 – was introduced by way of State Senator Kathy Campbell from Lincoln. It was designed to cap interest rates on payday loans at just 36 percent. This cap represented a major reduction from where the loan fees – when amortized for an entire year – currently stand.

In addition to APR caps, the bill was also aimed at changing the way debts are collected, while requiring more reporting to be done on the payday lending companies doing business in Nebraska. However, the payday lenders can breathe a sigh of relief, since the overhaul failed to get past the Nebraska Legislature’s Banking and Commerce Insurance Committee. This means that the 60 local payday lending locations in Omaha, and more than 90 throughout the state will operate per usual for the foreseeable future.

Senator Jim Scheer is from Norfolk and is the chair of the committee. He indicated that time was a real factor with regards to the folks supporting this bill. Those same folks met a roadblock when it came to a relatively shorter legislative session. The session this year is 60 days, while the following year will be 90. Session days alternate every year. If the senator does not name a particular bill as being a priority it will more than likely not make it out of the committee. The bill is then to be talked about on the full Legislature floor. Campbell did not indicate that the payday loans bill was a priority.

Sheer said, “It got past the point of being named a priority bill, and without that designation, it had no vehicle to get anywhere on the floor.  It didn’t make much sense from the committee’s standpoint to move it into the general file if it wasn’t going to go anywhere.”

When the 90 day legislative session rolls around there may be more time for discussions and amendments to the bill via negotiations submitted from both opponents and supporters. In a 60 day session, though, lobbyists and other interested parties do not have as much time to arbitrate and come up with solutions. This process proves disappointing to those who have a stake in the proposal.

The executive director of the Women’s Fund of Omaha Michelle Zych said, “Quite frankly, we were really surprised that it didn’t make it out of committee.” Zych’s group was the organization that originally pushed for the new regulations. Her supporters criticized the fees that are currently permitted on Nebraska payday loans. They believe that there are not many other states that will allow these higher rates, and that the fees currently contribute to consumers getting stuck in “debt traps.”

Opponents of the reform, like Brad Hill said that the industry is already sufficiently regulated and that borrowers are stopped from rolling over loans that they cannot afford to pay back in time. Hill then told the hard truth that many people don’t want to hear about: the fact that people who need small dollar loans do not have anywhere else to turn, other than to local payday lending locations or to online lending companies. Time is on the side of the payday lenders in Nebraska, for at least a little longer. Both opponents and proponents of the regulation will likely turn out in force when the time for the 90 day session arrives.

Walmart Announces New Tax Refund Cash Pickup Service

Every year as January comes to a close, people begin filing their tax returns. With this in mind, you can always count on Walmart to do what they can to turn a profit. This time around that profit may come in the form of their new service which allows consumers to forego a cash refund check with the ability to pick up their refunds in cash. As of January 20th this service is readily available and it goes by the moniker Walmart Direct2Cash. This new service promises to save customers money and time in comparison to traditional tax refund services.

Walmart is joining up with TPG, a Green Dot Company, along with Republic Bank & Trust Company, an FDIC member, two leaders in the tax-related financial service industry, to provide the Walmart Direct2Cash as a new option to millions of their customers. There are more than 25,000 tax preparation locations that are using software that directly interfaces with Walmart Direct2Cash, and this service may be provided for no additional fees, other than the initial $7 that is charged when customers file their taxes. Walmart is not charging any fees for refunds claimed at their locations.

Daniel Eckert, the Senior VP of Services for Walmart U.S. said, “know tax refunds can be one of the largest financial payouts of the year for many of our customers, and the last thing they want is to wait for their refund check to arrive and then spend money on unnecessary fees – in many cases upwards of $70 – to cash it. By skipping the check and choosing this new service, customers will not only save time, but also keep some extra cash in their pockets – two things Americans can always use more of.”

People are always looking for more convenient alternatives to the things that they already do. It seems that Walmart Direct2Cash will offer the convenience and security that consumers need, and allows everyday people to get their full refund amounts in cash, instead of a check. The government all too often mishandles refund checks, plus checks that are mailed are subject to theft, fraud and other problems. These issues can cause people to experience delays of weeks or even months while waiting for their yearly tax refund checks. With the ability to simply drop by the local Walmart to get their cash, people have an option that is a heck of a lot more convenient than the traditional refund delivery option.

When people choose the Walmart Direct2Cash option, they can also save a considerable amount of money on fees, compared to what they have to pay for the more traditional tax refund check cashing options. Take, for instance, a person who has received the average tax refund check for $2900, and who chooses to use a check cashing provider that charges 2 percent to cash checks. That fee alone could add $20 to the process of cashing a refund check; an amount that would be avoided if that same person were to use the flat rate fee charged by Walmart Direct2Cash.

Another benefit to Walmart customers comes in the form of the Jackson Hewitt tax consultants working at some participating locations. These consultants offer free tax filing assistance to customers to find eligible health care options that exist under the Affordable Health Care Act. These services help to complement the existing Walmart Healthcare Begins Here program, which provides basic health insurance guidance to customers. All of these new services go hand-in-hand with each other and provide additional revenue to Walmart, while making the entire tax refund service easier to get through for everyday consumers.

Chase Well Prepared to Successfully Enter the Mobile Wallet War

JPMorgan Chase is one of the most successful financial firms in the world. It should come as no surprise, then, to find out that this company is upping its game to compete in the mobile banking market. Last month, Chase’s CEO of consumer and community banking Gordon Smith informed investors that the mobile payment landscape was likely to become more confusing prior to becoming easier to understand. Smith did ease the sting of this statement, though, by saying, “But it will become simpler.” To make a long story short, this means that by the time things shake out in the mobile payment world, Chase Pay will do all that it can to be one of the easiest to use options that is still doing business. And the system has several features that will help it to stay in the game for a while and to successfully compete for a larger market share.

This announcement from Smith was meant to bring investors back to a view of the industry that closely resembles that of the earliest days of the mobile market wars. The sentiment then was: “One of these technologies will win out, but no one knows what it is.” This is a feeling that many remember from just a few years back when Google Wallet failed to live up to expectations. This service struggled to get merchant, customer and even banks to adopt it. Things reverberated more when the Isis Mobile Wallet, which changed branding to Softcard (in order to avoid any connection with the Islamic State terrorist group) pretty much died quickly. This death led to Google purchasing Softcard assets, and led to the popularity of the new Android Pay.

Apple Pay launched publicly in 2014, and started a whole new slew of mobile wallets, and eliminated the old though of only one company “winning” the mobile wallet war for supremacy. In fact, experts now believe that multiple third party providers will have successful mobile wallet products and that banks will now begin to launch their own, branded versions of this type of technology. In other words, it is no longer a battle where one winner takes all. The new theory has evolved into customers choosing a mobile wallet that has a lot in common with how they choose banks, cars or even computers. They will choose a mobile wallet that suits their needs or a brand that they have experience with. Wallet providers, therefore, will be ready to oblige consumers with different wallets with different features for people to choose from.

For the sake of argument, though, let’s say that the vision behind Chase’s offering is crystal clear. Smith said that Chase wouldn’t be investing as aggressively in its mobile wallet if it thought it was going to wind up as an “also ran” behind other mobile payment systems. No, Chase wants Chase Pay to be one of the top dogs.

But will Chase be able to pull this off? Well, the company has a brand name that many people are already aware of and comfortable with. This company is known for being a longstanding player in the financial world, so that will likely make many consumers feel safe in trusting their mobile payment needs to Chase Pay. Smith is also very experience in this field, and will help to lead Chase Pay into the trenches successfully. It also appears that Chase Pay will have plenty of features that consumers look for in a mobile wallet system. We will all have to wait a bit to see, but some experts believe that this mobile payment system does have what it takes to successfully stand as a mobile wallet victor when it’s all said and done.

A Seemingly Small Financial Emergency may be too much for Most Americans to Deal With

File this under bad news for the average American household: The majority of people in this country don’t have enough money saved up to deal with seemingly simple to pay for financial emergencies! Yes, most folks out there would have to seriously scramble if they had to suddenly pay for a car repair or medical bill that might cost anywhere from $500 to $1,000. This tidbit of information seems to indicate that most folks are living from one paycheck to the next, with very little financial wiggle room. An illness or car problem could prevent these people from having enough money to pay their monthly bills. A recent study found that only a little over 20 percent of people believe that they be able to deal with a financial emergency by cutting down on other expenditures.

An additional 15 percent of those surveyed said that they would have to get through a temporary financial setback by borrowing money from family members. Another 15 percent said that they would be forced to use their credit cards to get by. These statistics line up pretty well with findings from other studies done in recent years. The bottom line is that many Americans are in a financially difficult spot. Even though consumer confidence stats seem to show that consumers are feeling positive about the job situation in this country, the majority are still not putting money away regularly to deal with financial problems down the road.

A 2015 study conducted by the Federal Reserve used data that studied the financial health of U.S. households. It concluded that only about half of Americans regularly put money into a separate savings account for the future. Back in 2012, the repercussions of the Great Depression were still being felt by many people, and the savings rate in the country got all the way up to 11 percent. It fell again to 4.6 percent by the summer of the following year and hit 5.5 percent by the time winter rolled around. Before the 2008 financial recession most Americans seemed to feel financially stable. Back then, the savings rate reached a dismal rate of only 1.5 percent. This was during a time when people were using the equity in their homes like ATMs. This winded up getting a lot of people in trouble when their home values began to take a hit.

In the post-recession world, consumers have been trying to rebuild their financial futures. Millions of people lost jobs and found that access to loans and credit cards were difficult to come by. As the pressure started to die down a bit, these consumers have started to spend money more freely. According to the Federal Reserve, in 2014 just 47 percent of households in the country indicated that they were saving money for emergency expense. And if those folks were likely to experience a financial windfall, of say an extra thousand dollars, they would have been more likely to spend it than to save it.

Whether the next financial crash comes in just a few months or far in the future, Americans need to get educated and prepared to deal with financial problems. It doesn’t take a worldwide market crash to cause financial chaos in your home. For most Americans, simply dealing with life’s little financial emergencies may be enough to cause serious problems. Make saving money a habit. Pay into your savings before you do any spending, and you can make sure that you are at least financially prepared enough to deal with the most common types of money problems that always seem to arise at the worst possible times.

The Most Effective Methods to Repay Student Loan Debt Faster

One of the most difficult thing that millennials have to deal with, when it comes to their financial future, is the very real burden of paying of student loans. Being stuck with these loans often prevents young graduates from investing money or even getting their own homes. In a nutshell, student loans often feel like financial anchors that will never go away to the people who are stuck paying them off. In fact, the Federal Reserve Bank recently released a report that tallied up the average outstanding college loan balance at a whopping $24,301 – with 10 percent of borrowers stuck with debts that exceed $58,000.

Are you looking for tips on how to pay off your student loans faster? What follows are some tips that financial advisors often pass on to their clients to help them pay off their student loans, while maintaining a semblance of a normal life.

Consider Your Student Loan to be Like a Mortgage Loan

If you have a good job and are bringing in a steady income, you can treat that student loan debt the same way you would a big mortgage. Make efforts to make larger monthly payments. This helps to reduce the loan principal at a faster rate. If a student had $25K in student debt with 6.8 percent interest fees and a 10 year loan term, the payment each month would be about $288. However, if the borrower were to pay back $700 each month, the loan would be paid off completely in just a little more than three years. Paying down the principal on loans with larger payments allows borrowers to enjoy paying less interest on the loan.

Create a Plan to Eliminate Student Debt

Too many graduates just pick away at their student loan debts and complain about them to anyone who will listen. Instead of taking this approach, create a detailed plan to get rid of that debt that is hanging over your head. Break down the total amount that you owe, and come up with 3 and 5 year plans to help eliminate the student loan debt. You should break out your budget while you do this, so you can find other expenses that can be reduced or eliminated, so you can throw that money at your educational debt instead. Map out the next few years of student loan payments in detail, and then break down the large loan amount into smaller, more manageable monthly chunks to make the debt seem less overwhelming.

Set Up a Student Loan Repayment Account

It’s always possible for people to save a bit of extra money every month. Even if you can just get an extra $100 together after all the bills are paid, you can deposit that extra cash in an account that is completely dedicated to paying off your student loan debt. Establish a separate account that is ONLY for saving funds to pay off the educational debt. If you put the extra cash in your existing checking or savings account, it may be too tempting to spend the cash on other things.

Once you get your student loan debt paid off, use that extra money each month to invest and plan for the future. You worked hard to get your education and to pay off the loans that helped you to afford that education. When you are free from the educational loan debt, you’ll be able to breathe easier, and you’ll be able to get on the fast track to saving money for a better financial future.

The Facts about Payday Loans for College Students

The college experience is, for many, the first time that a person strikes out on their own and achieves a greater measure of independence. Oftentimes, though, students are not prepared for what it means to be somewhat “financially independent” when they are also just getting started and trying to earn a degree. There is no doubt that many college students, even those who come from well-to-do families, often find themselves broke and in desperate need of cash. This all begets the question of whether or not payday loans for college students are a good financial alternative.

People who are strapped for cash often find that payday lenders are their only alternative when they need to get funds for emergency expenses. There are tens of thousands of lower income, working class households in this country that depend on the services that payday lending companies provide. It should come as no surprise, then, that college students are seeking out payday advance loans at a higher rate these days. Many college students are on their own, as it were, and they oftentimes cannot turn to their parents for any extra cash. Mom and dad are probably already paying a lot for their offspring’s college education. And with so many college students being young and not having a proven track record with credit, college students often have very low credit scores.

A low credit score can immediately disqualify a borrower from getting loan approval from banks or credit unions. This does not, however, negate the fact that students need to have access to cash to get by from one week to another. There is food to by, expenses to pay and a whole host of other financial obligations that college students have to deal with; just like the rest of us. But is seeking a payday loan the best path for college students to take when they need access to fast money for emergency expenses?

The Right Kind of Payday Loan Applicant

Everyone really has to make their own choice about whether or not they should get a payday advance loan. But there are some criteria that student applicants should be aware of if they are planning on getting a payday loan. Here are some of the things that students should consider before they apply for a payday cash advance loan:

  • Is the student borrower employed? Payday lenders only provide loans to people who are employed and brining in a regular income. Because payday loans are typically paid back from the pay check of an applicant, there is no use in students without jobs applying for these types of loans.
  • Does the student have a checking account? Payday lending companies typically use either a postdated check or an automatic withdrawal from a borrower’s bank account. Any student who wishes to get a payday loan should make sure that they have a valid bank account.
  • Is the financial need relatively inexpensive? Payday lenders typically provide loans that run between $100 and $1000. In other words, payday loans shouldn’t be used to pay back student loans or to take care of larger debts. Typically, these types of loans are used to help pay for things like car repairs, emergency medical bills or simply to give the borrower enough cash on hand to get by until they get paid at work again.

Students should consider all of the information that we just shared to determine if they can/should get a payday loan. Payday loans do help young people to understand how important it is to pay back debts on time, and when used responsibly they can be a great financial help for working students who need fast cash for expenses.

Most Debt Collection Cases Reportedly Closed Amicably

The Consumer Financial Protection Bureau – CFPB for short – documented some very interesting information in their recent semi-annual report to Congress. It turns out, according to exhaustive research done at the CFPB, that the majority of consumers did not dispute debt collection company responses. The CFPB received roughly 85,000 debt collection complaints since the summer of 2013. This information was also included in their recent report that is required as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The most recent semi-annual report was the seventh posted by the Consumer Financial Protection Bureau. And like the sixth report that came out at the end of 2014, the CFPB noted that, “ “As we continue to emerge from the continuing effects of the devastating financial crisis of 2008, we find that debt collection is central and cuts across virtually all credit products: credit cards, mortgages, student loans, payday loans and other consumer loans. Currently, about 30 million consumers – nearly one out of every ten Americans – are subject to debt collection, for amounts that average about $1,500 each.”

The CFPB report went on to say, “Many companies in this industry play by the rules, but others cut corners and seek to gain an advantage by ignoring the rules,” according to the report. “These bad actors are a detriment to every company that is faithfully following the law, and their actions harm consumers.”

Of all the complaints that were filed to the CFPB, 34 percent were complaints about debt collection actions. This report happened to track complaints that were logged between April of 2014 and March of 2015. The addition of debt collection complaints began in July of 2014, by allowing consumers to post complaints in the CFPB’s complaint database.

The most common complaints about debt collection practices were focused on continual efforts by collectors to collect on debts that consumers did now owe on. These types of complaints accounted for about 38 percent of all the debt collection complaints that the Bureau has received. Other cases involved consumer complaints about information being provided to credit reporting bureaus. These complaints indicate that people only learn about accounts that have gone on to debt collection companies after they check their credit reports.

There were also quite a few complaints about the tactics that some debt collection agencies use. 19 percent of the logged complaints included information that indicated these agencies call too frequently or at bad times of the day. Additionally, calls made to places of employment seem to be a major source of contention amongst people who have filed complaints to the CFPB’s database.

Beginning on the first of June, 2015, the Consumer Financial Protection Bureau has already received well over 600,000 complaints. The most common topics of these complaints are issues with mortgage loans and debt collection practices/agencies. It will be interesting to see how all of the different categories shake out in the next semi-annual report that the CFPB provides to Congress. We can expect to see that report some time in December. It is a positive trend to see that people are actually taking action and reporting their complaints to the CFPB. While the Bureau certainly isn’t the ideal body to police most financial industries, the reports to Congress may help with some much-needed financial service reforms in the future. The data provided so far really does show that as much as people complain about debt collection companies, they still go out of their way to handle these issues in an amicable manner.

Even Wealthy People Can Have Bad Credit

While it is not all that difficult to imagine lower income people with low credit scores that is not always the case. There are plenty of people who don’t make a lot of money who happen to have good credit scores. In a like manner, you might not think that wealthy people would have any worries when it comes to their credit ratings. It turns out, though, that this is not true. There are plenty of very wealthy people in this country who have issues with their credit scores. It is at the point right now where even the rich need to be concerned about their credit scores, just like everybody else.

The recent economic problems that have taken place all around the world have put a lot of emphasis on credit scores, which, when they are on the lower end of the spectrum can limit a person’s access to obtaining loans, getting decent insurance rates and even getting hired for a new position. Many wealthy folks have actually hurt their credit scores without being aware of it. By making late payments, charging too much on credit cards and not using credit enough because of their higher income levels.

The bottom line is that being wealthy does not always mean that someone is necessarily wise when it comes to credit. Contrary to popular belief, a person’s savings and income don’t factor into their credit scores.

A financial advisor named Jeremy Portnoff said, Regardless of their finances, age, gender or ethnicity, people don’t have an understanding of how credit works. They should be aware of their scores, especially in this environment.” Mr. Portnoff went on to describe a client of his, who had more than a million dollars in assets, but still had a poor credit score. This person avoided borrowing money, rented his house and never used credit cards. These factors all worked together to create a sub par credit score and may hinder the person from getting a mortgage in the near future. Like many other people, this guy grew up with the belief that all credit was negative.

The credit crisis has made people of all economic classes more susceptible to lower credit scores. Everybody needs to have a good to excellent credit score to receive loans and to ultimately keep borrowing costs down for the entire country. Scott A. Beaudin, a financial advisor explained it like this, “We think the limit is at least 760 to qualify for the best rates.” Some people just don’t know how to build their credit scores, and many more don’t know how to keep their credit scores high over the long run. This is true for people who are rich just as it is true for middle and lower income households.

When the time comes to get a mortgage or to buy insurance, lower credit scores can be extremely harmful to wealthy people. If you have more assets, you have more of a need to insure them. But if your credit score is not up to snuff, the insurance companies will rake you over the coals when it comes to insurance premiums. No matter how much money you make, it is never a good thing to pay more for insuring your property than you ought to.

Credit scores generally range from about 300 points to 850 points. The sad fact of the matter is that most people don’t even have a clue about what their credit scores are until they apply for a loan. There is no excuse to be out of the loop when it comes to your credit score, as everyone is entitled to obtaining at least one free copy a year according to federal law.