Revolving Credit Takes Their Bite

Some consumers have reported increased credit card rates and reduced available credit after their mortgage company failed. They were not late on payments, they just have a loan with a distressed lender. Not all borrowers and loans served by American Home, New Century, and Novastar are risky exploding ARMs or in default.

Credit reporting bureaus share information with credit card companies. Borrowers with their credit linked to “failed” mortgage companies may find themselves penalized with higher credit card interest rates or reduced credit limits. Even if you are not late on payments you may be guilty by association. I had no control over the company that bought my mortgage or the company the lender contracted to service my mortgage. Do you? Does something I can not control make me a higher risk? Apparently we are guilty until proven innocent and charged accordingly.

I noticed the interest rate on my Chase Platinum Visa recently raised to 22.24 percent. I requested my credit report to confirm its accuracy and verify no late payments were reported. Then I made a call to Chase. I requested a lower rate based on information for their on-line application. My interest rate was lowered, but not as low as introductory rates. Get the customers in the door then do whatever you please with their rates. My mortgage is at a fixed rate and in no danger of exploding. I will pay off the balance and Chase PV will be reported “closed at customer request”.

You may get your credit report free once a year at http://www.ftc.gov/bcp/conline/edcams/credit/ycr_free_reports.htm