Want a Car? Bad Credit Won’t Stand on Your Way

When you have bad credit, then you’re probably scratching your head right now, trying to figure out how you can get an automobile loan. But to worry is really not what you should be doing.

According to a field study by J.D. Power & Associates there has been a significant decrease in the FICO score in the credit worth of automobile purchasers this past two months. From the average of 737 in 2009, it has gone down to 725 this 2012. This also led to the decrease in the retail transactions of vehicles from $29,223 by the end of 2011 to $27,953 this February.

The recession that occurred in the United States in 2009 led to the bankruptcy of credit cards in the country, this also affected the sales of vehicle manufacturers. But the impact was not at all that bad since it also paved way for the credit criteria to be less demanding, and the auto industry was able to recover right away. Now, according to the study by Power, those with bad credit have better chances of getting a car compared to those with excellent credit scores.

The D tier, those with 0 to 624 FICO scores have the highest percentage of purchases at 23% compared to last year. The C tier those with score of 625 up to 649 grew at 19%, the B tier with 650-679 increase at 15%, the A tier, those with good credit at 680 to 719 at 11% and the most excellent credit the A+ tier with credit standing of 720 to 999 composed the least percentage at 7%.

As a result of this slide toward the least-able consumers, “C” and “D” buyers combined accounted for 15 percent of all retail sales in the first two months of this year.

Those who composed the C and D tier composed 15% of the retail purchasers in January and February. These customers are young people with lesser money than other car buyers.

This also took as an advantage with the U.S. automobile industry’s drive for creating fuel-efficient cars. These automobiles are less expensive and they will definitely take the retail market by storm.

Transaction price are what people pay for when they purchase new automobiles, other fees just follow. According to TrueCar.com consumers in the United States have spent roughly $30,091 for a single vehicle purchase in March. This estimation is slightly smaller than the price during November last year, and the record of General Motors had for March.

But Power has a different view on events, according to them if transaction prices continue to decrease then there will post a problem for the industry’s profit.

1.5 Million Credit Blunder by Global Payments

One of credit cards’ worst histories of security breach has occurred this year. Visa and MasterCard users are facing the possibility of having their personal information stolen and according to sources Global Payments was the one to blame.

No records of credit card accounts, Social security numbers, house address and much other information were said to be taken from the archives of the company. However, Global Payments admit that they have been the mishap of the system and they estimated that about 1.5 million of their subscriber’s records have been tapped.

According to the company, though personal info was not taken, the possibility of identity theft and fraud may happen. In 2007, Heartland Payment Systems a company that manufactures swipe machines for credit cards also had their system hacked and 130 million credit cards were affected. For this weakness in their security, they had to pay a $139 million worth of legal charges in 2009, and it is very likely that Global Payments will suffer the same fate.

Visa has already removed the company’s name from its official list of providers; this is until they fix their security system. This does not prohibit Global Payment from delivering its job;though the move momentarily marks them for potential danger. The company expects to be restored in the list after they have updated their safety measures.

Last year, Global Payments had over 2.44 billion dealings with its 800,000 merchants all over the United States, making it rank seventh in the business.

Though investors may become hesitant in investing to the company after the incident, this does not mean that it will run out of business. Heartland, which had its blunders, was able to regain its loss. If Global Payments handles this fine, they will get their name reinstated in Visa’s list in no time.

Teens Should be Financially Literate

The month April has been declared as the National Financial Literacy Month. The purpose of this is to educate teenagers to be financially literate. It is very important for your young teenagers to know about credit rating before they are allowed to have credit cards. They have to know that lenders are investigating credit information before they issue credit cards. Educating teenagers to be financially intelligent would help them properly manage their finances in the future.

Avail of your free credit report. You can get a free credit report from the three big nationwide credit bureaus, Experian, TransUnion, and Equifax. These three bureaus have a common website at www.annualcreditreport.com. The free credit report is provided once every 12 months. You can also link to the Federal Trade Commission website at www.ftc.gov for free credit report.

Review with your teen the credit report. Evaluate your own credit report with your teen. Discuss with him or her every detail of information reflected in the report so that he or she can avoid financial pitfalls in the future. Discuss   most especially the importance of paying on time.

Essential information you need to discuss:

The credit report compiles the following information: Payment behavior of consumers, current balances and other information related to consumers’ credit cards and loans. Bankruptcies and liens are also compiled in the credit report. This information is reported by financial institutions to the three big credit bureaus.

What is the purpose of credit report? Credit report is the basis of lenders in approving or denying a loan or a credit card. It is also the basis of determining the rate of interest. A good credit history allows borrowers to get a new loan at favorable interest while a bad credit history requires a higher interest rate or it can even lead to a loan rejection.

Pay your bills before the due date. Credit report records every payment made. Payment made on or before the due date is a major factor in building an excellent credit rating. When the credit rating is excellent, consumers get the best interest rate for future loans, credit card and mortgage.

Credit Card Firm Security Breach Puts Canadians at Risk

A warning is given by Better Business Bureau that Canadian consumers might be affected by a security breach in United States.

According to Global Payments, a payment card processing company located in United States, its system has been hacked last Friday. As a result, both Visa and MasterCard are examining operations from the month of January to February.

Avivah Litan, a security analyst, said that the hackers could have possibly taken roughly ten million or more worth of cards.

According to Mark Fernandes, spokesperson of Better Business Bureau, B.C. consumers, especially those who shopped in the United States just this year, must check their financial statements during the last two months for any doubtful changes. If there is something you cannot recall doing, then it is highly possible that it is a false transaction.

Moreover, Fernandes said that it is still likely that the Canadians are in danger despite the fact that Global Payments is located in United States. This is because these types of firms are multinational and handle millions of payment transactions.

According to Andrea Woroch from Verizon Business, people must get in touch with their card issuers as soon as possible if they see something doubtful on their statements.

Based on an interview from the previous year, Woroch said that consumers often neglect little charges on their bills. Unfortunately, this is how others repeatedly take advantage of them.

Credit card scams are approximately just as profitable as the drug trade, warns the Canadian Anti-Fraud Centre. To avoid these scams, only give your card numbers through phone or Internet to trusted firms and always watch over your pin. Also, be cautious of emails that require account information.

Additionally, experts warn that the hacking of the Global Payments’ system could followed by another scam. Fernandes said that any emails allegedly from Global Payments concerning the breach might be a phishing attempt. On Monday, it is anticipated that Global Payments will give more information on the level and extent of the security breach.

Lowa City Must Put a Stop to The Proliferation of Payday Lenders

The City Council of Lowa is concerned about the proliferation of payday lenders operating in the city. Through its zoning powers, the city council wants to regulate the number of payday lenders in Iowa City to protect the welfare of the people in the local community and to strengthen the city’s economic development.

The members of Iowa Citizens for Community improvement are strongly supporting the move to:

• Limit payday lenders to only one per 20,000 residents in the city
• Observe one mile distance away from churches, residential areas, schools and parks. The distance between two payday lenders should be two miles.
• Stop new stores to operate in pedestrian commercial districts

Lowa City’s payday loans are limited to $445 and to be paid in full within 14 days. The borrower is required to issue post dated check amounting to $500 or another option is an automatic withdrawal of $500 from his/her bank account. In other words, the APR for this type of loan is more than 400 percent which is higher than the 250 percent the Mafia was charging during its hay day.

Borrowers of payday loans are easily trapped to repeat borrowing money from payday lenders because their paychecks are not sufficient to pay in full a $500 loan in two weeks. In fact, 98% of the funds released by payday lenders go to repeat customers. In Lowa City, 76% of payday loans released every couple of weeks go to new customers.

Payday loans create more financial burden in families instead of helping them. And the companies involved in this business are not paying their income taxes to the city of Iowa. Approximately, Iowa is losing $36 million from taxes every year. The money goes to the bank accounts of the CEOs’ of payday loan companies instead of going to the treasury of Lowa City.

This is the reason why the Iowa CCI members are pushing for the Lowa City Council to use its zoning powers to curb the increasing number of payday lenders in the city. The council should give priority to the interest of the people and not on the corporate interests. People should be put first and not capitalism.