In November of 2016, TransUnion reported that personal loan balances have surpassed the $100 billion mark. This includes mortgages and other personal loans. We have a healthy, well-functioning consumer credit market. There are other good signs also, including young consumers getting loans and low levels of delinquency.
In November of 2016, the Federal Trade Commission charged the prepaid card company NetSpend Corporation with not giving people access to money on their debit cards. NetSpend would delay activation of the card or block consumers from using the card. As a result of this, some consumers suffered severe hardships including evictions, car repossessions and late fees on bills.
Here are some ways to improve our credit score. Don’t max out your credit cards. Try not to use more than 30% of your available credit. Don’t be late on your payments. Even one late payment can affect your credit score. Don’t apply for too much credit.
Subprime credit is when your credit score is below 620 to 680, depending on the source. Some people feel that subprime credit allows people to get cars and houses that they otherwise would not be able to get. However, having subprime credit could cause you to have higher interest rates and higher fees.
In October of 2016, the Federal Trade Commission shut down a scheme in Arizona that took more than $9 million from consumers across the country, including military veterans. People thought they were investing in e-commerce websites with a 100 percent money back guarantee. After 90 days, the scheme runners would stop contact. People would not receive their promised returns or their money back.
A Reaffirmation Agreement is typically used in the bankruptcy process when you file for bankruptcy and you want to keep a house or a car. The Reaffirmation Agreement keeps you liable on the mortgage or the car loan even after the bankruptcy process.
In September of 2016, TransUnion found that consumers could be affected by 25 basis points in the federal interest rate hike, which is .25%. Of credit-active consumers, 68% of them would face a change in their monthly payments. If you have a variable rate product, you could face a payment shock. You may have a variable rate in your credit cards, home equity line of credit, and personal loans.
Credit bureaus gather your credit information and make credit reports. They come up with a credit score based on this information. The credit bureaus get their information from credit card companies, car loan companies, mortgage companies and other places. The main 3 credit bureaus are Experian, TransUnion and Equifax.
In August of 2016, the Consumer Financial Protection Bureau took action against the bank Wells Fargo. Education Financial Services is a division of Wells Fargo that manages student loans. Some of the things that Wells Fargo did to hurt student loan borrowers: applied payments across several loans in a way that raised fees for borrowers, not letting the borrowers know how to make partial payments to pay off loans, charging illegal late fees, and not correcting negative information to credit bureaus.
In August of 2016, the Consumer Financial Protection Bureau ordered the Bank of Omaha to pay $32.25 million for illegal credit card practices. The bank promoted debt cancellation products and credit monitoring products. The Bank made it hard for people to get the debt cancellations. Many times people did not get the credit monitoring they paid for.