Consumer Financial Protection Bureau takes action against credit - KULR8.com | Montana's News Leader | Billings, MT

Consumer Financial Protection Bureau takes action against credit bureaus

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BILLINGS, Mont. -

We have a consumer alert: Two major credit reporting agencies are being fined for deceiving consumers about the usefulness and costs of credit scores.

 The Consumer Financial Protection Bureau says Equifax and TransUnion promised in ads, credit scores and related products would be free or cost just $1. But customers were charged a recurring monthly fee of $16 if they didn't cancel their free trials.

The CFPB says TransUnion will reimburse nearly $14-million to consumers and pay a $3-million civil fine, while Equifax will reimburse $3.8-million and pay a $2.5-million civil fine.

There are dozens of credit reporting agencies in the U.S.

We wanted to find out if you, as a consumer, need to be concerned about being stiffed on your credit report.

Todd Buchanan with Buchanan Capital Incorporated read the article about CFPB taking action against credit bureaus. He says people should be more worried about how to build a strong credit score.

All of the lending institutions use different metrics to measure your score. You should know your own credit score, but to maintain it, Buchanan says pay your bills on time, take out manageable amounts of debt and build assets elsewhere.

He says if the bank sees your personal balance, and sees equity, it proves you know how to save by taking chunks of money out of your life to pay off debt.

Away to demonstrate your credit worthiness, he says, start reducing those loan balances.

"Focus on the higher interest rate of all of those loans, whether it's your credit card or your mortgage, or your car loan. Pay that one down first. Accelerate the pace at which you prepay your higher interest barring note so that you're not stuck with this interest rate that's just money you're paying the lending institution," he said.

He says the credit bureaus should be penalized for misrepresenting scores, but the consumer's job is to read the fine lines. The scores are fairly directionally correct, if you have a high credit score, you'll have a high credit score anywhere.

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