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Credit bureaus ordered to pay millions for deceitful practices

Most consumers in Tennessee have heard about credit scores and how important a role they can play in one’s financial outlook. Credit reports are also a valuable tool, in that they give a detailed look at a person’s credit history. Both credit scores and credit reports can be vital information for those who are considering bankruptcy as a means of relief.

For many people, the distinction between a credit report and a credit score is often unclear. While a person’s credit report can be obtained for free once every 12 months, credit scores must typically be purchased. Two of the major credit reporting agencies, TransUnion and Experian, were recently found to be taking advantage of unassuming customers who were not well-versed in understanding the difference. The Consumer Financial Protection Bureau ordered both companies to pay fines in the amount of $5.5 million, in addition to restitution to customers in the amount of $17.6 million.

One of the deceptive practices that the two credit bureaus were found guilty of was enrolling customers in, and continuing to charge them for, subscriptions when the customers thought they were making a one-time low cost or free transaction. The agencies were also found to have misled customers into thinking that the credit scores they provided to them were the same scores that lenders use in deciding whether to approve loans and extend credit. This is in fact not true, given that a person’s FICO score is the industry standard used by most lenders. Therefore, the practice was deemed misleading by the CFPB.

People who are dealing with a lot of debt often worry about their credit score. Those who are considering bankruptcy may wish to consult with an experienced attorney.

Source: Yahoo!, “If you paid to see your credit score, it may not be the real one lenders see,” Ethan Wolff-Mann, Jan. 10, 2017

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