(1) Experian—“Inquiries Shared Only With You.”
(2) Equifax—“Inquiries that Do Not Display to Companies.”
(3) TransUnion—“Account Review Inquiries.”
More than likely, if you see your credit card company listed in these sections, you are being
monitored. Make sure you thoroughly check your reports for, errors, mistakes and any incorrect
information. Any inaccuracies should be disputed as this information may be the reason universal
default occurred. Unfortunately, at this time, there is not much you can do if you have been affected
by a universal default clause. Calling your creditors and attempting to negotiate lower interest rates
is one option.
Consumers who are already over burdened with debt certainly do not need another heap of debt
unfairly forced upon them. Universal default punishes consumers and has the potential to ruin
credit history and credit scores. There is help on the horizon.
Lawmakers are responding to consumer groups who oppose such practices. In June of 2006, New
York became the first state to outlaw the practice of universal default. This issue has also gained
attention on the federal level. Recently, Democratic Rep. Keith Ellison of Minnesota introduced a bill
to the House which seeks to protect consumers from universal default clauses.
Rep. Ellison’s Universal Default Reform Act of 2007 would prohibit credit card companies from
raising interest rates on consumers based upon payment histories with other credit card
companies, utility companies and other lenders. Rep. Ellison has a series of legislative proposals
he plans to introduce as part of his consumer justice agenda. His Reform Act has the backing of
many consumer groups.
In the meantime, monitor your credit card statements, make it a practice to read the fine print on all
credit card applications and most of all, stay informed.
(2) Equifax—“Inquiries that Do Not Display to Companies.”
(3) TransUnion—“Account Review Inquiries.”
More than likely, if you see your credit card company listed in these sections, you are being
monitored. Make sure you thoroughly check your reports for, errors, mistakes and any incorrect
information. Any inaccuracies should be disputed as this information may be the reason universal
default occurred. Unfortunately, at this time, there is not much you can do if you have been affected
by a universal default clause. Calling your creditors and attempting to negotiate lower interest rates
is one option.
Consumers who are already over burdened with debt certainly do not need another heap of debt
unfairly forced upon them. Universal default punishes consumers and has the potential to ruin
credit history and credit scores. There is help on the horizon.
Lawmakers are responding to consumer groups who oppose such practices. In June of 2006, New
York became the first state to outlaw the practice of universal default. This issue has also gained
attention on the federal level. Recently, Democratic Rep. Keith Ellison of Minnesota introduced a bill
to the House which seeks to protect consumers from universal default clauses.
Rep. Ellison’s Universal Default Reform Act of 2007 would prohibit credit card companies from
raising interest rates on consumers based upon payment histories with other credit card
companies, utility companies and other lenders. Rep. Ellison has a series of legislative proposals
he plans to introduce as part of his consumer justice agenda. His Reform Act has the backing of
many consumer groups.
In the meantime, monitor your credit card statements, make it a practice to read the fine print on all
credit card applications and most of all, stay informed.
The Universal Default Clause Can Raise Your Credit
Card Interest Rates
by Lisa Phillips - May 2007
Card Interest Rates
by Lisa Phillips - May 2007
Have you ever been in a situation where you were able to pay most of
your bills but perhaps you let the least essential debt go for a month?
Well this can hurt not only your credit rating but also affect your
interest rates and credit limits with all of your creditors.
This is the practice of Universal Default. It is a relatively new clause
added to the terms and conditions of banks and credit card companies.
Now banks and credit card companies have yet another excuse to
charge you more money and potentially wreak havoc on your credit
scores. All without your knowledge.
Universal Default involves banks and credit card companies monitoring
your payment histories with other creditors, even your utility bills.
Essentially this means that if you are late paying a bill with one
company, your other creditors, which you are paying on time, can raise
your interest rates.
They can use your late payment with other credit card or utility
companies as a justification to raise your interest rates as high as
30%. Some banks even go as high as 35%. Because you have paid
one bill late, even something like a telephone bill, your other creditors
may now see you as a risk. Higher risks equate to higher interest rates.
Banks and credit card companies who practice universal default
generally monitor a consumer’s credit reports on a monthly, quarterly,
or yearly basis. The following are some reasons the universal default
clause is activated:
clause? First, take a look at your credit card statements and check to
see if your interest rates have changed. Second, order your credit
reports. You will want to pay attention to the following sections on each
of your credit reports:
your bills but perhaps you let the least essential debt go for a month?
Well this can hurt not only your credit rating but also affect your
interest rates and credit limits with all of your creditors.
This is the practice of Universal Default. It is a relatively new clause
added to the terms and conditions of banks and credit card companies.
Now banks and credit card companies have yet another excuse to
charge you more money and potentially wreak havoc on your credit
scores. All without your knowledge.
Universal Default involves banks and credit card companies monitoring
your payment histories with other creditors, even your utility bills.
Essentially this means that if you are late paying a bill with one
company, your other creditors, which you are paying on time, can raise
your interest rates.
They can use your late payment with other credit card or utility
companies as a justification to raise your interest rates as high as
30%. Some banks even go as high as 35%. Because you have paid
one bill late, even something like a telephone bill, your other creditors
may now see you as a risk. Higher risks equate to higher interest rates.
Banks and credit card companies who practice universal default
generally monitor a consumer’s credit reports on a monthly, quarterly,
or yearly basis. The following are some reasons the universal default
clause is activated:
- Late payment on a credit card, mortgage, auto loan or utility bill.
- Exceeding the credit limit on any credit card.
- Using 50% or more of your available credit limit on any of your
credit cards.
- Having too many credit inquiries.
- Carrying too much overall debt.
- Getting a new mortgage, auto or personal loan.
clause? First, take a look at your credit card statements and check to
see if your interest rates have changed. Second, order your credit
reports. You will want to pay attention to the following sections on each
of your credit reports:
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