Stanley’s plan on Debts and Credit

I have read this story on the US Embassy website of Stockholm: It was mid-19th century. When all became quiet after the Civil War and surviving soldiers started returning home, a drugstore owner in Waterloo got the idea of Memorial Day for the first time. He proposed that all the shops in the town remain closed for the day to honor the souls who could not return from the War. It was May 5, 1866.

During the same time, Retired Major General Jonathan A. Logan thought out another plan for those who survived the war. He guided the veterans to the cemetery to decorate comrades’ graves with flags. The day was name Decoration Day at that time.

The two ceremonies were combined in 1868 and in 1882 the name Memorial Day was coined. The day is not for celebration only; it is the time to offer our respect to those who dedicated their lives for the nation.

VantageScore is a new scoring model that credit bureaus are going to market this year, perhaps. The question is why VantageScore, why not FICO or NewGen FICO? I’m sure all of us have noticed the difference among the credit scores obtained from the three bureaus. This happens because each bureau uses different formula while calculating credit score. Bureaus anticipate that VantageScore will eliminate this difference by bringing in a sole scoring model.

VantageScore would be simple to understand and interpret too. Consumers can predict well in advance how certain financial activities will affect the score. It will be represented as Grades. If your score is in 900s, you will get A Grade, if it is in 800s you will get B Grade and so on.

The main problem with VantageScore is lenders, mortgage brokers, auto mobile dealers, banks – all have to change their system to adjust with this new model. So this is a huge process and the industry might not be willing to adopt this change. Now if your lender is not going to concentrate on your VantageScore, why would you buy this score?

Industry is saying that few lenders have shown interest towards this change, but there is no clue at all if the finance industry would accept VantageScore as the yard stick of consumers’ financial status or not.

Moreover, people are of opinion that VantageScore still depends on various factors on credit report. As all the creditors do not report to all the three bureaus, the chance of getting different score or Grade is still there; then what is the utility of a new model at this stage?

Source: ConsumerReports.org

Texas Attorney General has filed lawsuit against a loan company for their deceptive lending practices. The company used to claim themselves as an Internet company but offered loan to consumers. The story is well-known. They charged $30 biweekly for a $100 loan. Until you pay the principal amount back, they will continue charging your account.

So in a year, they collected $720 + wrap up fees for a $100 loan!!! Hence they charged 782% rate of interest, whereas Texas usury law restricts rate of interest at 10% only.

Now they lawsuit says they have to reimburse the amount collected from consumers illegally. Moreover they have to pay penalty of $20,000 per violation of Texas Deceptive Trade Practices Act and $10,000 per violation of Texas Finance Code.

Payday lenders, beware, the wheel has started turning to the opposite direction.

Source: WacoTrib.com