San Diego, CA. - Universal default, a dangerous adverse action against a borrower, is still largely an unknown, inconvenient fact among consumers. Universal default is a clause included within most credit card offers and agreements which says if you are late with any other creditor; you are considered late with them all. The ICFE was the first nonprofit group to speak out against universal default and its negative affects on consumer credit scores in October 2003.

The San Diego based, nonprofit, Institute of Consumer Financial Education (ICFE) is pleased to make available on-line, a free 26 slide PowerPoint presentation, designed for financial planners, credit and debt counselors to explain universal default and what happens when a creditor invokes the clause against a borrower to their clients. .

It comes into play when a consumer, who otherwise has excellent credit (and also a high credit score), suddenly has a negative item appear on their credit report. When negatives begin to appear on a report, the ‘universal default’ clause is often invoked.

The ICFE’s free online PowerPoint Show explains how universal default works, show examples of its wording in credit card agreements and provides some interesting facts and figures about the institutions which apply it to their delinquent accounts. For instance, more than one-third of major credit card issuers now say they act on these clauses regularly." A recent survey found that a staggering 44 percent of credit card issuers said they apply the rule to customers, even if they had no late payments on their own card.

The result of the so-called universal default clause is the low interest rates enjoyed at the outset of a credit relationship with a lender, will soar and, in more than a few cases, they may double or triple. Creditors and lenders are now more closely monitoring credit reports of their current clients for signs of trouble, especially with other lenders. 43% of creditors who practice universal default would enforce it if they deemed that a cardholder had too much overall debt and 33% would do it if they thought the consumer had too much available credit..

Missing or being later on a payment, even to the phone company, a book or music club can be very costly if it makes it on to your credit report. It is now much more than a $30 or $40 late payment fee, because not only does it trigger higher fees and interest charges, it will also lower credit scores.
For more information about the ICFE’s free online presentation, please visit the ICFE web site at: www.icfe.info or you contact: Paul Richard RFC at 619 239 1401.