In an interesting turn of events, the credit reporting bureau TransUnion Corp has settled a $10 billion class action suit. As a result of the settlement, millions of people may be able to access their credit scores for free while receiving some additional benefits that will help them keep their credit safe.
Why the Lawsuit?
For quite some time now, TransUnion Corp has been battling charges that were filed in U.S. District Court in Chicago. According to the suit, the company sold information about its consumers to a variety of retailers and lenders. The suit alleges that the information was customized to suit the needs of these lenders and retailers, who then used the information for marketing purposes. According to Federal law, the private credit information of consumers cannot be sold unless special circumstances have taken place, such as when a consumer applies for a loan. Therefore, selling this information to lenders and retailers is a direct violation of the law.
What Will Consumers Receive?
If the settlement, which still has to be reviewed in Federal court, is finalized, approximately 160 million people throughout the United States will be affected. Those that are included in the class action suit, which is thought to have the largest number of plaintiffs ever included in one class action suit, will receive free access to their credit scores. Although Federal law currently allows consumers to receive a free copy of their credit reports each year, it does not call for providing consumers with their actual scores.
In addition to receiving free access to their credit scores, the plaintiffs in the case will also receive either six months of the basic credit reporting services and a cash payment or they can choose to receive nine months of enhanced services. The basic service normally sells for $59.75, while the enhanced service includes more detailed information such as an insurance score and a mortgage rate simulator.
How Will Consumers Benefit?
All consumers can benefit from receiving free access to their credit scores and from the credit reporting service. Those that are in financial trouble because of the mortgage collapse or those facing other financial economic problems, however, will particularly benefit from the service. This is because the service provides them will immediate access to their credit information and they can find out their credit scores at any time, which means they can make wiser financial decisions. The service is also set up to notify consumers when changes take place in their files, such as when an new account is opened in their name, which is beneficial when it comes to fending off identity thieves.
Experts in the field are astounded by what TransUnion Corp is offering in the class action suit. Ken McEldowney, who is the executive director of Consumer Action, has referred to the settlement as being “mind-boggling” and “astonishing.” He went on to say, “It’s everything we tell consumers that they need to find out if they have problems with their credit. They are getting information on how to improve it and information about whether they are credit worthy.”
About the Author:
Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com
Tuesday, June 10, 2008
TransUnion Corp May Soon Reach a Settlement for Class Action Suit
Monday, May 5, 2008
The Credit Card Fees You Didn’t Know About
Do you know that you are paying for the convenience of using a credit card, even if you don’t make your purchases in plastic? Or, do you realize that using a rewards credit card to make a purchase actually cuts into the profits of the merchant you are purchasing from? Most consumer do not know that using a credit card actually costs merchants each time that card is swiped. In fact, credit card use has been a very touch subjects for many merchants and several of them are banding together to try to bring about a change.
Understanding Interchange Fees
When a place of business decides to provide its customers with the option to pay with a credit card, that business has to set up an account with a credit card processing company. The transactions then filter through that company in order to ultimately land in the merchant’s bank account. Along the way, however, several fees are taken out of the transaction. Among these fees are interchange fees.
Interchange fees are set fees that banks charge for completing the credit card transaction. These fees are typically assessed as a percentage of the transaction amount, with the average fee being 2%. Therefore, if you purchase an item for $10 at a store, $0.20 of that transaction is paid to the bank in the form of an interchange fee.
Effects on Pricing
Although a $0.20 fee for a $10 purchase may not sound like a whole lot, these interchange fees really add up for merchants. This is particularly true with smaller “mom and pop” establishments that already have very small profit margins. If they purchase an item for $8 and sell it for $10, for example, the $0.20 interchange fee leaves them with only $1.80, but much of this goes toward paying employees and otherwise keeping the establishment running. Therefore, many smaller businesses are claiming that interchange fees – which continue to go up – are effectively running them out of business.
For smaller stores dealing with interchange fees, they are faced with a conundrum: they can choose to stop accepting credit cards, but they may cause them to lose a great deal of business, or they can simply accept the credit card fees. In an effort to try to break even, many of these merchants choose to raise their prices to compensate for the interchange fees. Of course, if they raise them too much, they will no longer be competitive and business can suffer.
Rewards credit cards pose an even greater problem for some businesses because the costs of providing cardholders with these rewards is often passed onto the merchant. American Express is notorious for having hire interchange rates because of its rewards program, which is precisely why some businesses choose not to accept American Express credit cards.
About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com
Sunday, February 3, 2008
Choosing a Credit Card
Shopping around for a credit card can save you money on interest and fees. You’ll want to find one with features that match your needs.
This information can help you
- Understand the features of credit cards
- Compare credit card features and costs
- Know your rights when using your credit card
- File a complaint if you have a problem with your credit card
Wednesday, January 23, 2008
Why pay for credit repair services when you can do it for FREE?!?
When it comes to repairing your credit, you're the best person for the job. Credit repair scam artists will charge you anywhere from $500 to $1,500 or more upfront, and promise you everything from a new Social Security card to perfect credit. But these companies can't do anything for you that you can't do for yourself -- for free -- and they might ultimately do more harm than good. What should you do if you have bad credit? Here are 10 tips that are designed to improve your credit history and raise your credit score: 1. Pull a copy of your credit history. Each credit-reporting bureau is required to give you one copy once a year. You should pull copies from each of the bureaus, since they sometimes collect different data. 2. While you're there, buy a copy of your credit score from Equifax.com. Equifax offers a FICO score, also known as a Beacon score, which is from Fair Isaac, the company that created the concept of credit scoring. Most creditors will pull a FICO score, so you should see what they're seeing. Your credit score will give you a snapshot of what your credit information means to your creditors. The FICO score runs from 350 to 850. The higher the number, the better. Your target should be to have a credit score of at least 720. 3. Check your credit history thoroughly. You're looking for errors, misinformation and negative information that might count against you. File a dispute with the three credit-reporting bureaus if you spot any errors. Some credit reports have serious errors in them, so fixing these will boost your score. 4. Understand what kind of debt you're facing. Make a list of everything you owe, the interest rate each debt carries, and the minimum payment due each month. Then, prioritize your debt: mortgage, real estate taxes, credit cards and medical bills should be paid in that order. 5. Negotiate with your creditors for a lower interest rate. Paying less in interest means more of your payment each month goes toward paying down your balance. If you have a good credit score (over 720 is a starting point), you should be able to find other credit cards featuring zero percent to 5 percent in interest for the first year, or for the life of a balance transfer (check out sites like CardRatings.com and CardTrak.com to compare credit-card offers.) Just be sure you read the fine print: Some credit cards require you to charge on the new account each month or face a stiff fee. 6. Pay down the debt with the highest interest rate first. Pay your mortgage and home equity loan and lines of credit in full each month. Then, make sure you have enough cash to make all of the minimum payments due on your debt each month. Then, throw any spare cash at the debt that carries the highest interest rate first. Once you've paid down that debt, transfer all of the extra cash you're paying each month to the debt with the next-highest interest rate, and so on. 7. Pay everything on time, even if you can make only the minimum payment. The most crucial component of your credit history and credit score is your ability to pay your bills on time each month. Paying on time shows your creditors that you take your debts and obligations seriously. Even one late payment can seriously damage your credit history and credit score, even though it can take a year's worth of on-time payments to start to heal your credit history and raise your credit score. It doesn't seem fair, but that's how the credit industry works. 8. Don't charge more than 25 percent of your maximum available credit limit. If you carry a credit-card balance that is a higher percentage of your available credit limit, your credit score will go down. Why? Because creditors believe if you charge the maximum on your credit cards, it means you can't properly manage your credit. You're better off spreading out your debt between three or four different cards than having it all piled on one card. 9. Don't open and close a lot of accounts. Again, a credit score tells current and future creditors how likely it is that you won't pay back your debts. It assesses how risky a borrower you are today. Every time you apply for a new credit card, that creditor pulls a copy of your credit history from the credit-reporting bureaus. That "inquiry" gets reported on your credit history. Too many inquiries in a short period of time signals that you may be getting low on your available credit and need more cash. Even though you might be interested in getting 10 percent off your first purchase for opening a new account, it looks different to a prospective creditor. 10. Don't share credit (except with a spouse). It's easy to tell someone that you'll "co-sign" a credit card, student loan or a mortgage loan application, especially if it's someone you've known for a long time. But it's also easy to wind up in a situation where that friend or relative stops paying his or her bills (for whatever reason) and your credit will take a big hit. Once you're a co-signer for a loan, you're legally obligated to make those payments -- whether or not you can afford them. So think carefully before you agree to co-sign a loan, and nip the problem of bad credit before it begins. Article source - Inman News http://www.inman.com/hstory.aspx?ID=65868 To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.
