Many of you have been asking yourself, "How do I restore my credit?" After the economy took a downturn a few years ago, many people found themselves in dire financial straits, and felt like the only way to put food on the table was to charge everyday necessities to their credit cards. Once the bills came, there was no money to pay them (and everyone knows you can not pay off plastic with more plastic!).
As a result, credit repair company after credit repair company started springing up and running ads, all claiming they had the ability to fix their clients' financial woes. "Company XXX was able to restore my credit in just a few months," the ads would say. But, did they really? And even if they did, what is the government doing to keep people out of debt?
Recently, the Senate has been debating the Restoring American Financial Stability Act of 2010, which many are hoping will be the saving grace so many consumers need. If passed, the act will:
1. Give state Attorney Generals the authority to play a role in enforcing the rules created by the Consumer Financial Protection Bureau.
2. Ensure that debit interchange fees, also known as "swipe fees", are proportional to the processing costs and generally reasonable.
3. Allow credit card companies to create minimum purchase floors when customers pay with their debit or credit cards.
4. Crack down on debt settlement and debt negotiation companies (which are far different than a regular credit repair company), requiring them to provide detailed disclosures and limiting the fees they're allowed to charge.
All things considered, the Act does not have an answer for people asking the question of "how do I restore my credit?", Although it is still possible for senators to work in some amendments to address the issue.