Your credit score, which is mainly based on your history of repaying loans, can determine your ability to borrow money and how much you will pay for it. Here is good news for some consumers: Your score may improve as a result of changes in how credit reports and scores are compiled.
FICO, a company that provides software used to produce many consumer credit scores, announced that unpaid medical debt will not have as big an impact on the new version of its most popular credit score. And the Consumer Financial Protection Bureau (CFPB) announced that it will require the major consumer reporting agencies to provide regular accuracy reports to the Bureau on how disputes from consumers are being handled. The CFPB said medical debt in particular is a source of numerous complaints because billing process can be complicated and confusing to consumers. The CFPB noted that the accuracy reports will help it hold credit reporting companies accountable for ensuring that erroneous information does not damage your credit score.
These changes may help raise some consumers’ credit scores and reduce their borrowing costs. In general, though, to build or maintain a good credit score, consumers need to manage their money carefully, and that includes using caution when taking on additional debt.
For more information, click here.
- Ask students if they have requested copies of their credit reports and if the information was correct?
- Have you applied for new credit recently, and it so, what was the outcome?
- What is the best strategy to maintain or improve your credit score?
- What are the legal steps to take to improve your credit report?
- If you apply for too many new credit cards, how it might affect your credit score?
“Free credit scores” sounds good, right? But what if you signed up for “free credit scores,” then found out you were enrolled in a credit monitoring program that costs $29.95 per month? Not so good. That’s what the FTC says happened with a company called One Technologies, Inc. Now the company has agreed to settle the FTC’s charges that it misled consumers by advertising “free credit scores” but failing to tell them that they would be enrolled in a credit monitoring program for a monthly fee.
One Technologies, Inc. offered people “free” online access to their credit scores through at least fifty websites, including freescore360.com, freescoreonline.com , and scorescense.com. But according to the FTC, the company didn’t clearly inform people that once they got their score, they would pay $29.95 per month for a credit monitoring program. You could only get out of that monthly fee by calling to cancel. Some people had to call multiple times. Others were denied refunds. One Technologies, Inc. will pay $22 million to compensate its customers and must get their consent before billing them. Also, it must provide the customers with an easy way to cancel.
For additional information, click here.
- What can you do if you become victim of a deceptive marketing practice?
- Where can you get your free credit report at least once every year?
- Ask students to obtain their credit reports from Experian, TransUnion, and Equifax.
- Ask students to search the Internet for “free credit scores” and summarize their findings.
Correcting inaccuracies in your credit report may help you improve your credit history and credit score, which credit card issuers consider when deciding whether to offer you a card and how they will determine your interest rate and credit limit. You also can find out if an identity thief has opened credit cards or other accounts in your name.
By federal law, you are entitled to one free copy of your credit report every twelve months from each of the three major nationwide consumer reporting agencies (also called “credit bureaus”)—Equifax, Experian and TransUnion. Each company issues its own report, and because some lender do not provide information to all three of them, it’s useful to request your report from each one in order to get a comprehensive view of you credit history.
For additional information, go to
http://www.AnnualCreditReport.com; http://www.equifax.com; http://www.experian.com; http://www.transunion.com
1. Why is it important to check your credit reports every year?
2. Why should you request a credit report from each one of the three credit bureaus?
You may want to use the information in this blog and the above websites to discuss
* What should students do if they find inaccuracies in their credit reports?
* Have students draft a letter to the credit bureau to correct the errors in their credit report.