Capital One to Pay $210M for Deceit

Capital One Bank is charged to pay 210 million dollars for the costs and compensation for the settlement of the deceptive credit card practices it has been involved in. The penalty for this giant company was imposed by the Consumer Financial Protection Bureau.

According to the Washington Post, McLean, the manager of the bank that is based on Virginia should repay the customers who availed the credit monitoring and add-on services that they charged. The bank allegedly hired a third party to prey on clients who were jobless and were suffering from bad credit. The callers from the bank would tell the customers that the services were free or compulsory. Some of them were even promised that their credit scores will boost when they apply for the service and that is not all; they were also told that it will grant them debt forgiveness when they have illnesses. Some of the customers were enrolled in the deal even without their knowledge, and they were fined for it.

This case is the first ever that the CFPB or the Consumer Financial Protection Bureau is handling and investigating since its creation in 2011. Republican lawmakers are opposed to its establishment and have been trying to shut it down for two years. However, in its two year operation, the CFPB is stronger than ever and now it is going after Capital One.

According to the CFPB director, Richard Cordray, the agency is going to make sure that the companies that are practicing deceptive acts contrary to law will not be tolerated and they will make sure that they will pay for their insolence. Breach

Ryan Schneider took responsibility for the illegal activities that their bank has done. As the credit card division president he admitted that they are liable for the work that their employees have done for them. The bank will be paying $25 million worth of damages to CFPB, another $35 million will be paid to the Office of the Comptroller of the Currency and they will be reimbursing $150 million worth of cash to over 2.5 million of their clients who had availed the service from August 2010 and January 2012.

Five Steps on How to Keep a Good Credit Score

One of the advantages of having a good credit score is that you can get good rate on a mortgage or any other type of loan. However, lending firms are not the only ones who uses your credit score but also some insurers, cell phone providers, landlords, and employers. Here are five tips on how you can build and keep a good credit score.

First, make timely payments because 35 percent of your credit score is derived from your history of paying your debts on time. Sign up for free email alerts that the majority of credit card companies send to the consumers. These will remind you more or less a week before so that you won’t forget paying.

Second, be cautious about how much of your available credit you are going to use because 30 percent of your credit score is affected by the amount you owe. It is good if you use 30 percent of it but it would be best if you use only 10 percent or less.

Third, do not close your old accounts because it will decrease your overall available credit. As a result, it might increase your utilization as well which, in turn, could more likely have a negative effect on your credit score.

Fourth, consider applying for different kinds of credit such as installment loans, those with a fixed payoff period, and revolving loans, those loans that are open-ended. Some examples of installment loans are auto and student loans, and an example of revolving loan is credit card. According to the credit agencies, it is best to have a few of each kind of credit.

Fifth, check for errors in your credit report. You can get a free copy of your credit report once every year from the big three credit reporting agencies – Equifax, Experian and TransUnion. If there are errors on your credit summary, account information or personal information, contact the creditor immediately.

Six Tips in Repairing Poor Credit

Having a good credit score is important because it is something that landlords, employers and lenders check to know whether or not you are trustworthy. Moreover, your credit score reflects your financial status so if you have a poor credit score, creditors will consider you a high risk and have small chances of getting a loan or opening new accounts. If you have a bad credit, the following are some tips on how you can fix your credit score.

First, pay your bills on time because this will be the biggest factor that has an effect on your credit score. Make sure that you have a budget or enough money to pay your loans or credit cards on time.

Second, consider taking on an installment loan. This will show creditors that you can manage having the two major kinds of credit, which are revolving and installment. If handled responsibly, this can help increase your credit score.

Third, consider getting a secured credit card, which limits your credit to the amount equivalent to your down payments. Use it responsibly and it will certainly improve your bad credit score.

Fourth, don’t throw away your old credit cards. If you already paid off the account, just leave it open because closed accounts usually have a negative impact on your credit score.

Fifth, check for errors in your credit report. You can get a free copy of your credit report once every year from the three credit reporting bureaus, which are Equifax, Experian, and TransUnion. Check for erroneous information that could potentially lower your credit score and if there are errors, take corrective actions.

Sixth, ask for help from a professional. Debt problems can be a little overwhelming so if you feel that you cannot manage it on your own, ask help from a credit counseling agency. They will assist in you in looking at options and also on how you can fix your credit.

CFPB Will Manage Credit Bureaus Starting September 30

On Monday, the Consumer Financial Protection Bureau will declare that it will start managing the top credit agencies, which are companies that gather financial information of every person.

Besides banks, credit agencies, together with mortgage brokers, payday lenders and credit card companies, will be one of the financial institutions that the CFPB supervises. The bureau was brought about by the Dodd-Frank financial reform law in the year 2010.

CFPB will manage and make regulations encompassing more or less 30 credit reporting firms, which is 94 percent of the $4 billion credit reporting market. Some institutions included are Equifax, Experian and TransUnion, and others with over $7 million worth of revenue every year.

According to Richard Cordray, director of CFPB, handling the credit reporting market will guarantee that it will operates appropriately for the consumers, lenders and economy.

Since the past, credit reporting firms are already under the Fair Credit Reporting Act and have been managed by the Congress. Now, they also have a federal supervisor.

On Monday, a field hearing will be held in Detroit to gather information from experts, industry groups and community groups concerning credit reports. CFPB will publish in its website, consumerfinance.gov, the regulation stating its administration over credit bureaus.

Credit reports are significant to the life of every consumer. For instance, it is used as basis in approving loans and it can help companies evaluate a potential employee.

However, there some reports that discovered between 1 percent and 25 percent of credit reports have erroneous information that could have a negative impact on the ability of the consumer to apply for loans. A few of the most common errors in credit reports include inaccurate credit limits on accounts, loan and credit cards that a person never opened, overdue dates, and Social Security numbers.

On September 30, the administration of the CFPB over credit reporting bureaus will begin. After that date, on-site assessments will be conducted by the bureau immediately. As present, CFPB is managing loan originators, mortgage servicing companies and payday lenders.

Credit is What Matters Most

During the 1990s, Ray Pridmore, the manager of the Australia Bank would ask Scotland Yard police to escort him in managing his loan problems. In those years he was feared by many, now he is retired and is living a happy life with his wife, Patsy Pridmore.

Pridmore was in charge of over 280 autonomous teams, handeling over $6 billion worth of loans across Australia, United States, Ireland and Britain. His three brothers were police officers from London.

In his term, Pridmore started the use of warning systems and their banking principles were able to save the bank from losing hundreds of dollars from being written off. The efforts of the NAB also have major roles in the success of the operations of the bank.  Most of the members of the NAB were called “lifers” because they started out in the company wearing cheap clothing and worked their way to success. They were driven in making the bank the best among others and they have done this all because of passion and not contracts nor bonuses.

Don Argus was the credit assessment team of the banks in the 1980s before he became its chief executive officer in 1990. He was very strict with disciplining his staff and in the lending regulations of the banks. Back when Pridmore first joined the company his main option was to go to Argus’s office when he needed help. Credit was most essential in the business it was the life of the whole bank.

The managers of the banks were very cooperative with each other. They shared their ideas and trusted each other in the business. Pridmore would still find time to catch up with his old staff members and co-manager. In fact, they would meet every month in an unofficial distinguished old gentlemen’s club also known as DOGS.