How does the financial reform legislation affect your future ability to get credit?

The pending financial reform legislation could affect your ability to get a new mortgage, auto loan or credit card because new standards for granting credit will be mandated.  I am referring to the U.S. Senate’s recently passed S 3217 bill, which is commonly known as the financial reform legislation.  It still must be reconciled with a version the House of Representatives passed, but major revisions are not expected.  This legislation has been a top priority for President Obama.

How will this affect you?

First, this legislation addresses a serious concern that people with low credit scores and little income were given mortgages and other types of loans that they shouldn’t have.  The criteria for approval became so low in 2006 and 2007 that many who could not afford their loans got them anyway.  So what does this mean to you?  This means your credit score is now more important than ever.  If you are below a 700 credit score, you should take a serious and hard look into your credit health.  The days of easy credit are over for good.

Second, there will be new regulations increasing criteria for lending.  Things like no-income verification mortgages will no longer exist.  Additionally, under many circumstances, banks will have to assume some of the risk if they sell your loan.  As a result, the documentation and income verification you will need will not only have to match your ability to repay the loan, but must be in good verifiable order.

Third, the time to get larger loans like mortgages will increase.  This is mainly a result of requiring more documentation combined with a new lengthily verification process.

We are entering a new era of credit and financing.   It will affect most everyone as I described above, including small business owners, where their personal credit is essential.

To see a summary of the financial reform legislation click here:

What can you do?

Plan ahead when using your credit report and credit score to get a loan or credit card.  Make sure you have researched the lender’s reputation, rates and terms before you apply.  Also, ensure your credit is the best it can be.  A simple way is to use

Smart Credit has the only simplified horizontal credit report with action buttons, on each element of your credit report, allowing you to control your credit and identity with the simple push of a button.  It includes all your credit scores as well.

Use the action button to ask your creditors anything.  Perhaps you want a better interest rate or pay off a collection account.  No need for phone calls, writing letters or looking up account numbers.  You can even fix credit report errors, get goodwill corrections of negatives, recover from identity theft, and replace a lost or stolen credit card, all directly with your creditors.  It’s fast and effective!

Smart Credit’s Always Active Complete Protection gives its members the most complete credit monitoring and identity protection available.  It also includes our Rapid Response action button in alerts for the fastest way to stop identity theft.

David B. Coulter – Founder and C.E.O. of

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