Pay-on-time Borrowers Punished Anyway
Banks continue to make innocent consumers the victim of their past mistakes with credit rating agencies exacerbating the problem. A recent Washington Post article, “Realtors Group Lobbies Against Credit Score Hits Once Equity-line Limits are Cut,” describes the damage being done to folks whose credit scores are, unknowingly, cut after their equity-line or credit card limits have been reduced.
We are not talking about those who don’t pay their bills on time. These are people who, despite being up-to-date on their loan payments, have had their credit scores dropped through no fault of their own. This can lead to loan rejection or, at best, higher interest rates for them.
The National Association of Realtors (NAR) has asked Fair Isaac, the predominant credit rating firm, to change its formulas so as not to penalize those with excellent payment histories. In addition, NAR is pushing for federal legislation to include credit scores with annual, free credit reports from the three, major national credit bureaus.