Consumer Finacnial Protection Bureau-Rebuilding Your Credit Score

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Consumer Financial Protection Bureau – REBUILDING YOUR CREDIT SCORE
Rhoda Agyeman

After the market crash of 2008 and the recent recession, consumers are strongly encouraged to possess some knowledge of the economic system to enable them to practice financial responsibility. Knowledge about topics like checking accounts to more complex issues such as banking regulation laws, are necessary to promote good financial practices. This need to educate and protect consumers was the motivation for the development of the Consumer Financial Protection Bureau (CFPB).

The Consumer Financial Protection Bureau, established in 2011 under the Obama administration, is an independent government agency focused on consumer finance markets. The agency seeks to enable consumers to take control of their economic lives through education of relevant guidelines and laws. CFPB also protects consumers by supervising the conducts of credit unions, banks, and other financial institutions to ensure compliance with regulatory guidelines. Essentially, the goal of CFPB is to make the world of consumer finance as simple and transparent as possible for anyone; from first time checking account owners to first-time home-buyers. Information relating to nearly all financial issues may be found on the agency site: http://www.consumerfinance.gov/. To promote the use of this beneficial resource, CFPB provides information in various languages including: Spanish, Chinese, Vietnamese, Russian, and Haitian Creole, to name a few. Assistance can also be received in over 180 languages by contacting the bureau at (855) 411-2372.

The website provides information covering a wide range of topics including strategies on rebuilding credit score. A credit score is a number that is used to predict how likely you are to pay back a loan on time. Credit scores typically range from 300 – 850. A number closer to 850, usually makes it easier to qualify for loans and often results in better interest rates. Credit scores are vital in today’s economy; some ways to get and maintain a good credit score include:
→ paying bills on time
→ Not using too much of the credit available
→ ordering credit reports yearly and disputing any errors

For more information on credit score or how to maintain a good score, see
http://www.consumerfinance.gov/askcfpb/315/what-is-my-credit-score.html

While maintaining a good credit score is important, various circumstances can ruin a good credit. In the event a consumer has an unfavorable score, the following tips may be beneficial in rebuilding good credit:
● Be proactive in dealing with creditors
→ Rather than receiving numerous phone calls from creditors, contact them and inform them of your situation to set-up a plan that is more convenient for you. (ex: a payment plan)

● Avoid paying upfront fees to “repair” your negative credit history
→ Stay away from companies or websites that promise to “fix” your credit score by paying a fee. The FTC states that such companies may result in consumers finding themselves in trouble by committing illegal conduct based on the advice of these companies.

● Tell the credit report companies any inaccurate information on your credit report
→ In a letter, provide the credit reporting company with any information you believe may be incorrect. The companies are required to investigate legitimate claims within 30 days. If an error is found, the credit reporting company must make the correction in your file. Include copies of documents to support your claims.
See: http://www.consumer.ftc.gov/articles/0058-credit-repair-how-help-yourself#diy for more information

● Seek credit counseling from legitimate sources such as nonprofit organizations
→ Find legitimate credit counseling organizations that can advise you and assist you in managing debts, and developing a budget, as well as provide educational resources. Possible places to consider include universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service
A list of approved agencies can be found at: http://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111

Successful and ineffective financial strategies for rebuilding credit and other financial related topics are also discussed on the Consumer Financial Protection Bureau site. To better serve you, the consumer, the CFPB website encourages the use of online forums where consumers can post real-life experiences. Stories about financial products or services and comments regarding recent regulation developments are welcomed in an effort to promote openness and gain insight on the issues affecting consumers. CFPB furthers its mission of serving consumers by reading the submitted stories and assisting where possible.
See: http://www.consumerfinance.gov/your-story/ Many consumers have had both negative and positive financial experiences; to learn what to avoid and ways to improve, it helps to share and read the responses of others.

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