Posts Tagged ‘personal debts’

Payday Lenders Under Fire

Monday, January 23rd, 2012

Payday lenders are out to exploit those hit hardest by the domestic slowdown, welfare bodies are warning.

The South Australian Council of Social Service has spoken out against payday lending companies after receiving a volume of complaints from concerned consumers.

Borrowers are being unfairly lured into taking out loans which, in some cases, appear to be interest-free, but which instead incur massive fees.

Cash Converters is one firm that has come under particular scrutiny for this practice. Despite their claims that no interest is payable on their loans, the charges often result in huge return rates for the lender.

The Advertiser reported that a desperate mother who took out a loan of $1,500 from the Cash Shop faces repayments totalling $2,600 in just four months – 73% interest.

Consumers turning to payday loans because of their struggles against the increasing cost of living are finding their problems exacerbated by interest rates and/or fees in excess of 100%.


Debunking the Credit Score Myths

Thursday, September 8th, 2011

When it comes to personal debts, banks and credit card companies have devised a numerical and statistical analysis of the consumer’s creditworthiness through the implementation of credit scores. This rating is based upon the credit report and data mining information gathered by credit bureaus (like Veda Advantage in Australia, Experian in the United States, and Equifax in the United Kingdom) on stores, financial institutions, and other businesses where consumers have made small to big transactions. FICO and other prominent credit scoring systems are used to evaluate the financial risk posed by lending money to consumers. Therefore, a low-income consumer with a history of delinquent paying of bills may get a low credit score as compared to a high-income individual.

Aside from banks and other financial institutions, mobile phone providers, insurance firms, real estate agencies, and other businesses use credit scoring to determine approved credit and set credit limit. Even though paying the bills on time would mean better credit scores, many of us don’t know how the scoring system works. Besides, we don’t know all the factors involved in determining credit score. Some consumers get bad credit scores especially if they can’t identify fact from fiction. Here are the common myths on credit score: (more…)