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Help with new credit notices

By Lucy Lazarony · Bankrate.com
Thursday, January 13, 2011
Posted: 1 pm ET

New consumer credit decision notices are on the way.

Starting Jan. 1, new rules from the Federal Reserve and the Federal Trade Commission require lenders to provide new credit information to credit card customers and other borrowers of consumer credit.

For help in understanding these new notices, the Federal Reserve is providing consumers with a new online publication, "What You Need to Know: New Rules about Credit Decisions and Notices."

According to a press release from the Federal Reserve, the new publication explains the type of credit notices consumers may receive and provides links to sample notices.  The publication also explains what consumers should do if they receive a notice, including instructions on how to dispute credit report errors.

The three types of new credit notices consumers may receive are: a risk-based pricing notice, a credit score notice or an account review notice.

Risk-based pricing notice. You may receive a risk-based pricing notice if a lender offers you credit with terms that are less favorable than terms offered to other consumers because of information in your credit report. If you receive a risk-based pricing notice, you will be able to obtain a free credit report to check the report's accuracy.

Credit score notice. Instead of a risk-based pricing notice, you may receive a notice that states your credit score and provides information about how your credit score compares with other consumers' credit scores. If a lender chooses this option, the lender must provide the credit score notice to all credit applicants, regardless of approval or credit terms offered.

Account review notice. If your annual percentage rate on an existing credit account is increased because of a review of your credit report, you may receive an account review notice from your lender or credit card issuer.

Credit card companies make periodic reviews of their customers' credit records. And if there has been a change in your credit report since you initially applied for the credit card, your issuer may increase your APR.  In that case, you would receive an account review notice providing you with the credit report information that resulted in the APR increase on your credit card.

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