You Could Be A Victim

The Universal Default Claused practiced by many lenders and credit card issuers may be costing you money, all without your knowledge. Have you ever been in a situation where you were able to pay most of your bills but perhaps you let the least essential debt go for a month,

Well this can hurt not only your credit rating but also affect your interest rates and credit limits with all of your creditors. This is the practice of Universal Default. It is a relatively new clause added to the terms and conditions of banks and credit card companies. Now banks and credit card companies have yet another excuse to charge you more money and potentially wreak havoc on your credit scores.

All without your knowledge. Universal Default involves banks and credit card companies monitoring your payment histories with other creditors, even your utility bills. Essentially this means that if you are late paying a bill with one company, your other creditors, which you are paying on time, can raise your interest rates.

Banks and credit card companies who practice universal default generally monitor a consumers credit reports on a monthly, quarterly, or yearly basis. • Late payment on a credit card, mortgage, auto loan or utility bill. • Exceeding the credit limit on any credit card. • Using 50% or more of your available credit limit on any of your credit cards. • Having too many credit inquiries.

• Carrying too much overall debt. • Getting a new mortgage, auto or personal loan. How can you tell if you have been affected by a universal default clause, First, take a look at your credit card statements and check to see if your interest rates have changed. Second, order your credit reports. More than likely, if you see your credit card company listed in these sections, you are being monitored.

Make sure you thoroughly check your reports for, errors, mistakes and any incorrect information. Any inaccuracies should be disputed as this information may be the reason universal default occurred. Unfortunately, at this time, there is not much you can do if you have been affected by a universal default clause.

Calling your creditors and attempting to negotiate lower interest rates is one option. Consumers who are already over burdened with debt certainly do not need another heap of debt unfairly forced upon them. Universal default punishes consumers and has the potential to ruin credit history and credit scores. There is help on the horizon. Lawmakers are responding to consumer groups who oppose such practices. In June of 2006, New York became the first state to outlaw the practice of universal default.

This issue has also gained attention on the federal level. Recently, Democratic Rep. Keith Ellison of Minnesota introduced a bill to the House which seeks to protect consumers from universal default clauses. Rep. Ellisons Universal Default Reform Act of 2007 would prohibit credit card companies from raising interest rates on consumers based upon payment histories with other credit card companies, utility companies and other lenders.

Rep. Ellison has a series of legislative proposals he plans to introduce as part of his consumer justice agenda. His Reform Act has the backing of many consumer groups. In the meantime, monitor your credit card statements, make it a practice to read the fine print on all credit card applications and most of all, stay informed.

These are where you go in order to get paid credit reports. Some services have more complete information than others, as well as more services and benefits. If you carefully read over the available reviews it will be easiest to see which ones are worth the money and which ones are best avoided. Once you have figured out which credit monitoring services are the best, you will want to compare the other services that they offer as well as the cost.

You might just want to use the cheapest one, but if one of the more expensive services has other features or benefits it might be worth paying the extra money. Some have automatic alerts that are sent to you should something be changed in your credit report, which would save you from having to log on and check this yourself all the time. You would only have to take a look when something had changed.

You will probably want to stick to the services that offer you credit reports from all three agencies, as well as your credit scores from each. As long as you are paying, you might as well get the most complete information possible. This will give you the best chance of finding any discrepancies in your information as well. If you only look into the report from one agency you might miss incorrect information that the others have, which could badly affect your credit. You want to keep track of what is happening in all three.

When you are a teenager, you often have a limited amount of money at your disposal. So, it is very important that you spend that money judiciously. It is likely that, you are unable to figure out as to where all your money has gone. It is an indication that, it is high time you develop the habit to monitor your expenses and spend more carefully. Some of the tips given below can help you in this task.



The money that you get every week or month is fixed. So plan your expenses in advance. Make a list of those expenses that are essential and allot a certain amount to each of them. It should include major expenses like cell phone plans, restaurant bills, gas for car, etc. Additionally, a small amount has to be kept aside for some minor unplanned expenses, which are bound to happen. Planning your budget is not very tough.