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We have all heard that new laws have been passed to reel in the credit card companies. Well those new laws, for good or bad take effect Monday, 2/22/2010.

Here are the details by category.

Let's start with interest rates:

In today's mortgage market PMI can be a key part to you getting a mortgage. While not all loans require PMI many do if you are putting down less than 20% of the purchase price.

PMI A.K.A Private Mortgage Insurance

It is an insurance policy which lenders often require you to have when you purchase a home with less than a 20% down payment. The insurance protects the lender but you get the priviledge of paying for it.

There are some loans that do not have PMI. USDA Rural Development loans, VA loans and some portfolio products do not require a buyer of a home to have PMI. If you are buying today your lender should be able to explain what loan is best for you, not for them, and if PMI is required they should know why and when you can get rid of it.

Some reasons why PMI might make sense:

Homeowners insurance is a necessity when you own property. I had the opportunity to speak with Theresa from The Guaraldi Insurance Agency in Lebanon, NH. When I have clients who are looking for insurance that is one of the places that I highly recommend. They have been great with my clients.

Theresa told me that if you do upgrades on your home, often you can get a discount on your homeowners policy. New roof = discount, new furnace = discount etc. Many new homeowners buy their homes,  do some upgrades and never think to ask their insurance agency for a discount.

I don't know if all companies do this but Nationwide does.

If you have The Guaraldi Agency, 603-448-3250, now and have done work on your home, you should call them. If not, check with your agency and see if they offer the same thing. 

The number of times you apply for credit makes up 10% of your credit score.

While these numbers have changed a lot in the past 2 years, the average consumer has not applied for new credit in the past 20 months. When you apply for any type of credit it indicates a need for more liquidity. While it is not always the case, credit repositories view your application for credit as a risky behavior where you may be getting in over your head. That is why they lower your credit score when you apply.

Your next Credit Tip. 15% of your credit score is determined by the age of your credit. Many people hurt themselves when they accept offers for low interest rate credit cards. The new card has no age/history as it is a brand new card. They transfer their balance to the new card (often maxing it out which hurts because ...they have borrowed more than 1/2 their limit, see our last credit segment)