You've heard the news about the changes in credit scores and the impacts of these changes are yet to unfold.
You can rest assured that this is the first step in major changes in banking reform on both the business and deposit account holders end.
Tighter financial requirements on the banks meaning higher reserves, stricter lending guidelines.
Banks may possibly have more toxic assets to sort through, also higher credit requirements will be placed on the credit requester (borrower); higher reserves and more documented application and verification procedures.
What you as a consumer and a small business owner needs to know are the facts, your financial report card, A.
K.
A.
, your credit report the all knowing all seeing document that portrays the type of financially responsible person you are.
A document built with mathematical algorithmic functions to measure your financial risk, your employable risk, your insurable risk and policy rate, your education funding ability, your overall financial intelligence.
The very document attached to your social security number makes you a verifiable statistic.
The way you handle your finances, your obligations to debt, your tolerance and control over risk and investment (investment by means of leveraging credit and outside capital resources (OPM).
To your lien holder prospects, your insurance companies and your outside financial risk takers and debt providers you are a profit center waiting to happen, hopefully you will take on a debt agree to pay for some item consumable or not.
Then you will agree to pay for it over time with interest because of the risk you place on us via our trusting your financial where with all.
You the consumer agree and sign the promissory agreement, commence business, and the relationship begins.
Funny; more people will create useless, bad debt in to their lives, for example; young teenagers through grown adults will spend money on a credit card to fill an empty pleasure.
Let's say going to the movies, out to dinner, vacationing, office equipment; anything to fill an emotion of need or emptiness.
Sure these are purchases driven to create happiness, convenience, time freedom, capital acquisition, a temporary solution to fill a basic void.
I can make this statement from both personal and professional intelligence.
Let's say that we use the statistical figure of the 80/20 rule.
We know out of the 100 people who spend on their credit cards, 80 of these prospects are spending over their limit, 20 percent are within their tight budget.
Out of the 80% who are over budget 80% of these people at a minimum will have trouble keep up payments and the negative aspects of low credit scores will have an impact dramatically.
Possible all 100% will suffer some possibly no negative aspects reflecting on their individuals credit report.
Out of the 20% of the budgeted credit holders 80% of them will stretch out their credit card payments beyond the billing cycles which will report carried debt and weigh negative at he same time depending on the threshold of available debt to current outstanding debt.
The remaining 20% of the debtors will again payoff the credit card debt, bringing their balances down to zero, take advantage of low or no interest rate charges.
Their credit scores reflect positively and new lines of credit become available with rewards and benefits.
Now back to the new law changes for credit, we can imagine that we have become a loose spending money grows on trees type of society.
The reins are about to tighten up more now than ever before.
You as a consumer need to batten down the hatches and get ready for new changes.
As the credit brigade locks down the availability of credit card lending, banks will tighten on all ends, you will need to be a "perfect citizen" to obtain any credit.
Don't for get that as you know your fico score is your passport to everything from jobs and insurance to borrowing capital; you also have other areas associated with credit, medical, unemployment, investing and assets, drivers license.
Your Identity is also a t risk.
Identity theft will hit new heights and hackers have been waiting for this moment for a long time.
A full scale security system needs to be waged on your financial affairs to get them in order.
Whether or not you decide to do something now is a choice you'll ultimately make.
My suggestion is to get it done now.
Tighten the main sails and batten down the hatches on your financial vessel.
Get your credit cleaned up and start to find light at the end of the tunnel.