If you’ve ever had trouble managing debt, chances are good that your credit scores have taken a hit. Lower scores result in a greater chance of being rejected for a new credit card in the future. People who want to start fresh but are having trouble being approved for new lines of credit may want to check out a recent article on the FreeScore blog.

In “Companies Revive Expired Debt in Exchange for Credit,” the experts at FreeScore examine a new way for subprime borrowers to obtain new lines of credit.

The post cites a recent Wall Street Journal article that explains how banks are teaming up with debt collection agencies to recover expired debt. Banks give debt collection agencies the authority to issue credit cards in exchange for fees and higher-than-average interest rates. The catch? Anyone who accepts one of these new cards must agree to pay part or all of their expired debt.

This stipulation has generated some scrutiny from federal authorities because of unclear or misleading wording associated with certain offers. Some borrowers accept these new credit lines without understanding they will be responsible for repaying expired debt. They also don’t understand that by accepting the new cards, the statute of limitations that protected them from paying the old debt is now void.

Others who read the offers carefully are sometimes more than happy to accept the terms of the agreement. Consumers feel like they are given a second chance to rebuild credit and make better financial decisions.

Whatever your credit status, give yourself an advantage with the Power of 3 from FreeScore. Not only will you receive access to your three credit scores and reports at the top 3 credit bureaus: TransUnion, Experian, and Equifax. You’ll also gain the peace-of-mind protection of 24/7 credit monitoring and automatic alerts. Your credit is too important to leave to chance. Don’t let identity theft or undetected errors ruin everything. With services from FreeScore, you’ll find it easy to stay on top of your complete credit profile. You’ll even get monthly updates to your credit reports and scores, so you’ll always know where your credit stands.

Leave a Reply

Your email address will not be published. Required fields are marked *