The Federal Reserve (the Fed) has recently announced another benchmark interest rate hike. California consumers should know that this will cause interest rates to increase across the board. This is because banks base their “prime” rates on the interest rate set by the Fed. Then, all other interest rates are set according to these prime rates. Of course, this is the fifth Fed-induced interest rate hike since the Great Recession ended. Also, with economic improvements forecasted, experts expect more increases in the near future. With this in mind, California consumers should take a good look at their credit scores and credit card balances.
Then, before the Federal interest rate gets any higher, they should improve their credit scores in order to qualify for the best possible interest rates. Also, consumers in California should pay down high credit card balances in order to avoid paying even more in interest charges down the road.
How the Prime Interest Rate Hike Affects Credit Card Users in California
Most California consumers will first notice the overall interest rate hike in their credit card bills. Unlike car loan, student loan, and mortgage interest rates, credit card APRs increase immediately when the Federal interest rate goes up. Granted, most credit card users will notice only a small rise in their interest charges. For example, according to The New York Times, the average household will pay about $15 more annually.
Still, if everything goes as predicted, the Fed will raise their benchmark interest rate at least three more times in 2018. This means that California credit card users with high balances, who already pay heavy interest charges may pay significantly more in the next year. Therefore, now is a good time to get balances down. In addition to eliminating rising interest charges, California consumers who get their balances down to 30% or less of their spending limits should notice a boost in their credit scores.
Why the Prime Interest Rate Hike is a Good Incentive for California Consumers to Improve their Credit Scores
Even if interest rates increase across the board, California consumers can still get the best possible interest rates by improving their credit scores. The best way to do this is to create a credit repair plan, and stick to it. Generally, this involves getting current with bills, paying down high credit card balances, and using credit cards and loans responsibly.
It’s also a good idea for California credit users to check their credit reports at least once every 12 months. This gives them the opportunity to look for signs of identity theft, as well as for mistakes and errors. Unfortunately, creditors and the credit bureaus frequently mishandle consumer information. Then, the mistakes made by these organizations show up as credit report errors. Often, these inaccuracies are significant enough to bring down credit scores.
The Fair Credit Reporting Act (FCRA) enables California consumers to fight credit report errors by giving them the right to accurate credit reports. However, consumers must find these mistakes in order to have them removed. This is where the Fair and Accurate Credit Transactions Act (FACTA) comes in. This statute entitles consumers in California to free copies of their credit reports from the three major credit bureaus every 12 months. Just go to www.annualcreditreport.com, and get credit reports from TransUnion, Equifax, and Experian all in one place.
If, while reviewing your credit reports, you find credit score harming errors, contact Credit Repair Lawyers of America in California. When you trust our firm with your credit issues, an experienced credit attorney will do whatever it takes to get errors removed from your credit reports – legally and for free.
The Free and Legal Way to Get Better Credit in California
Don’t let fraudulent items or errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (916) 438-9400 or sending him a message through our contact page.
For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/california/credit-repair-ca/. Or, to learn more about Free Credit Repair After Identity Theft, check out https://creditrepairlawyersam.com/california/fix-identity-theft-ca/.