Details released by the UK Insolvency Helpline have shown that credit cards are contributing to worrying levels of personal debt . The organisation is calling for more debt relief for those getting into financial problems.

A representative for the UK Insolvency Helpline has said that many people in the UK are finding themselves in financial difficulty due to an inability to follow through on their good intentions, including paying off the debts on credit cards and overdrafts .

Richard Sorsky, a councillor at the Helpline, said that many people intend to pay off their debts but then use the money for other purchases. Read full article…

Many business owners don’t fully understand how business credit scoring works. Although the calculations involve complex financial formulas, there are simple principles describing the process. The information contained herein outlines these principles and demystifies the business credit score.

The business credit score was introduced in 1956 by a company named Fair, Isaac and Company, now known as Fair Isaac Corporation or FICO. It was sold as a formula that accurately predicted the likelihood of a business paying its future debts based on its past actions, a new business concept that paralleled a similar development in the consumer market. B

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Credit card users in Australia could be tempted to compare the market following an announcement by a leading financial institution.

National Australia Bank (NAB) has announced that it is to reform the way payments and balance transfers are managed on its credit card accounts.

The move, which NAB said is the first of its kind by a major bank, is set to lead to lower interest payments for credit card users.

More than 1.5 million customers will benefit from the moves, which come after pressure from consumer advocacy groups and are in line with proposals made by the Federal Government during the recent election campaign.

Lisa Gray, NAB’s personal banking group executive, said: “Consumers may be unaware that typically across the finance industry their credit card repayments are used to pay off balances attracting the lowest interest rate first, leaving the higher interest balance to attract interest charges.

“This will no longer be the case for NAB customers. Read full article…

ANZ has become the first bank to be hit with a lawsuit as part of a huge class action aimed at recovering “unfair” penalty fees.

According to news.com.au, the suit against ANZ has been lodged with the Federal Court and will be the first of many against Australia’s major banks over the coming months.

The news website quoted various other sources including the Sydney Morning Herald, which stated that the entire legal action against the banks – which is being organised by litigation firm IMF – has attracted more than 200,000 customers who believe they have been ripped off by exception fees on credit cards and various other accounts.

NAB, Westpac, Commonwealth Bank and BankWest are among the other institutions that are expected to be served as part of the class action.

The outcome of the action could have a huge impact on the rights of discerning consumers who may want to compare credit cards and other financial products. Spe Read full article…

By now, you’ve probably seen or heard that mortgage rates are at or near record lows.

While this is true, it doesn’t mean everyone out there qualifies for a record low mortgage rate.

The low, low mortgage rates you see advertised on television and elsewhere always assume you have an excellent credit score.

In other words, 720 and above, or even 760 and above in some cases.

I recently came across a credit score table from Fico®, the inventors of the Fico score, which illustrates the difference in mortgage rate at different credit scoring levels.

As you can see, a credit score between 760-850 qualifies for the lowest rate, which is a rather arbitrary 3.954% APR (I say arbitrary because a bunch of other factors affect mortgage rates as well).

But we can still pull some value out of this table by looking at the other credit scores and associated mortgage rates.

For example, if your credit score is 620 (what I consider a bad credit score), your mortgage rate shoots up to 5.543%.

That’s more than one-and-a-half percentage points – on a $300,000 loan amount, the difference in monthly payment is nearly $300!

So always be sure to check your credit report months before even thinking of applying for a mortgage to avoid any unexpected surprises and unnecessary rate increases.

Remember, the difference between a good credit score and a bad credit score could be enough to kill your hopes of getting a mortgage altogether!

Tip: How to raise your credit score.