The TransUnion Settlement and Credit Repair:
What You Need to Know

TransUnion, one of the three major credit bureaus, recently entered a settlement that has the potential to help just about every American change their financial future and repair their credit. TransUnion, together with Experian and Equifax, make up the “holy trinity” of credit bureaus. The information they gather on each one of us determines, in large part, where we live, what kind of car we drive, even what kind of job we have. The reports each of these three companies provide to lenders, landlords and employers influence just about every facet of normal daily life, and few people understand this. Even fewer people understand that under Federal law, there's plenty that can be done to protect yourself and ensure that the information the three major credit bureaus report is really an accurate reflection of you as a consumer.

What does the TransUnion Settlement have to do with Credit Repair?

Clearly, the information the credit bureaus gather is sensitive. There are federal laws that regulate how consumer credit reporting agencies gather their information, as well as how they can use it. One of those laws states that the bureaus can sell publicly available information, but not private data, and the Chicago case revolves around this point.

TransUnion has denied any wrongdoing. Colleen Ryan, a spokesperson for the company stated “There's been no finding that TransUnion violated any law.” This isn't to say that no laws were broken, just that nothing has been proven yet. All the same, TransUnion discontinued this particular practice in 2001, and recently agreed to a settlement of epic proportions in the credit industry in an effort to end the class-action lawsuit that's been pending for close to 10 years.

There's plenty you should know about this settlement if you have any interest in cleaning up your credit, changing your lifestyle and surviving the current economic turmoil. With a little time, patience, and discretion, the offerings in this settlement can be used to dramatically change your financial future by helping you to repair your credit reports.

What's in the TransUnion Settlement for Me?

The settlement is being offered to an estimated 150 million consumers. Want to know if you're one of them? Well, it's a reasonably safe bet you are. You see, the settlement is being offered to anyone who had an open line of credit anytime from 1987 to May of 2008. Open lines of credit can include student loans, credit cars, auto loans, mortgages – pretty much anything you may have purchased on a credit account or line of credit. So you can see that's just about anybody over the age of 18 from the last twenty years.

TransUnion is offering two options, and regardless of which you choose, you'll have the tools you need to shift your financial destiny and become a much more savvy and educated consumer, as well as work towards repairing your credit. The first option is six months of TransUnion's credit monitoring service, free of charge. This will allow you unlimited access to your credit reports and scores, as well as email updates when something changes on your report. The second option gives consumers nine months of the credit monitoring service, as well as access to the scores used in insurance decisions and TransUnion's mortgage simulator, helping consumers to see how their credit scores affect their mortgages (hint: your credit score can affect your mortgage in ways that will cost or save you hundreds of thousands of dollars!).

There are a few things you should know before you rush off to sign up. If you choose the first option, valued in the settlement at $59.75, you sacrifice your right to be a part of the pending class-action lawsuit, although you can still bring an individual case against TransUnion. If you choose the second option, which is valued significantly higher in the settlement at $115.50, you waive your right to any further legal claims in the matter. There is a third option, although it's probably an outside chance at best, and not much use in repairing your credit. You can sign up for a cash payment instead of the free services. Here's the catch: the money won't be available for at least two years, and it will only be paid if there's any money left over after post-settlement claims. On the other hand, you can sign up for the first two options from now until September 24, 2008 at www.listclassaction.com. That's when it's anticipated that the court will approve the settlement.

How Will this Help Me Repair My Credit?

Imagine that you're looking for a house, and you find one that you absolutely fall in love with. It's within your price range, let's say $175,000. Your scores are okay – not great, but not lousy –and you get a rate of 6.5%, making your monthly payments on a 30-year mortgage somewhere around $1,100. Over the course of the next 30 years, you'll end up paying close to $400,000 for your house, or approximately $225,000 more than the purchase price. Now, what if you had great credit and got a rate of 5.5% - just 1% lower than the previous example. On a 30-year mortgage, your payments will be roughly $990, meaning you'll end up paying a little more than $350,000, or about $175,000 more than the original purchase price.

Here's where credit repair comes into play. The difference between the total you'll pay in the first example and the total you'll pay in the second is $50,000.

So the question is; would $50,000 change your financial future? The answer for most of us is a clear and resounding “Yes!”

All it takes is a little bit of patience, dedication, and persistence to repair your credit and make the changes in your financial habits that will translate into higher credit scores, and TransUnion has delivered an unprecedented tool for you to use to repair your credit. Using the TransUnion service, you can see the effect of every financial decision you make. Opening a Home Depot card to save 10% on that purchase will have an effect on your credit score. So will paying off that Visa card, or closing it altogether. Which decisions will support you in repairing your credit and becoming financially free? Now you can know immediately the weight and effect of any decision you make, and it's free!

Factors to Consider When Choosing to Repair Your Credit
Using These Tools

Now, it's not all good news. There are a few more important factors to consider. First, under federal law, you're already entitled to one free credit report each year from each of the three major bureaus. The advantage to the TransUnion settlement is that you have unlimited access to your reports of a six- or nine-month period, giving you a more immediate response of how financial decisions affect your score.

Also, TransUnion is only one of the three major bureaus. You're only getting their version of your credit report, not the other two. Still, allowing for a certain margin of error, the TransUnion offering should give you a pretty good idea of how you are perceived as a credit risk by lenders.

And it's also important to note that the TransUnion credit score is not the FICO score that many lenders use to determine credit worthiness. TransUnion calculates their score based on their data and using their own proprietary formulas, and Fair Isaac Corporation (FICO, get it?) uses their own formula as well. Because each company is using its own formula to calculate your score, there can be a significant difference between the scores from each one. In spite of the drawbacks, the TransUnion settlement is a tremendous advantage for consumers, available for only a short time. Taking advantage of the tools provided to monitor your current financial profile and habits, and making the changes necessary now, while these tools are available, can ultimately lead to a dramatic change in lifestyle.