Poor credit scores likely to continue holding back borrowers

09.26.09
By Nicholas Storie

Consumers with poor credit scores can forget about securing favorable terms from their lenders, according to one leading personal finance columnist.

According to Susan Tompor of the Detroit Free Press, new government regulations will ensure that the credit card industry never goes back to its old ways of allowing easy credit to those with questionable credit scores.

Tompor cites credit experts who warn that those with lower credit scores will find it harder to gain credit because lenders will be affected by rules making it tougher for them to impose punitive interest rates and other fees on people who fall behind.

In general, credit card companies have long relied on those with poor credit to pad their profit margins by imposing high interest rates and late fees that can exceed $40 in some cases. However, this prompted a public outcry over time, especially as the recession set in and more people experienced difficulty paying down debt.

The new rules will take effect in early 2010 and will govern many different aspects of credit card activity, from late fees and punitive interest rates to marketing cards to college students.

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Keeping a healthy credit score may be more important than ever in the coming months.