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Repair Credit
Understanding Your Consumer Rights |
When you have unforeseen circumstances
such as a loss of income, debt problems, or you've been denied credit, it's very important
to understand your rights as a consumer. Luckily, the Federal Trade Commission (FTC) acts
as an enforcer to ensure credit laws are being followed and your rights are being
protected.
Credit laws exist so all consumers are
given a fair and equal opportunity to receive credit or resolve disputes with creditors
and credit bureaus.
Let's take a look at the rights you have under various laws.
Fair Credit Reporting Act (FCRA)
The FCRA was enacted to help ensure consumer reporting agencies -- such as credit bureaus
-- supply correct and complete information to lenders when looking at your application.
According to the Fair Credit Reporting Act:
- You have the right to receive a copy of
your credit report. And it must be accurate.
- You have a right to know who is
requesting your credit file. The full name of the business asking for your report must be
given. This request is valid for a year or the last two years if for employment reasons.
- You have the right to a free copy of
your report if you've been denied credit because of information supplied by a credit
bureau. You have 60 days from the denial to make this request.
- You have the right to question the
accuracy or completeness of your credit report. You can file a dispute with the bureau and
business that furnished the information. They are legally obligated to start an
investigation, and if mistakes are found, they must report the correction to all three
credit bureaus.
Equal Credit Opportunity Act
(ECOA)
The ECOA "prohibits credit discrimination on the basis of sex, race, marital status,
religion, national origin, age, or receipt of public assistance". Creditors aren't
allowed to use any of this information against you, period. ECOA was enacted primarily for
consumers who deal with businesses that extend credit on a frequent basis such as a
finance or mortgage company.
According to the Equal Credit Opportunity Act:
- You have the right to have "public
assistance considered in the same manner as other income". In other words, welfare or
other recipients cannot be denied credit based solely on the source of their income.
- If you're denied credit, you have a
"legal right" to know why. The creditor must give you a notice "that tells
you the specific reasons your application was rejected or the fact that you have the right
to learn the reasons if you ask within 60 days.
Fair Debt Collection Practices
Act (FDCPA)
The FDCPA "prohibits debt collectors from engaging in unfair, deceptive, or abusive
practices while collecting debts". The FDCPA applies mainly to personal or household
debt such as medical costs or money borrowed for the purchase of a car.
According to the Fair Debt Collection Practices Act, debt collectors:
- May call you only between 8 a.m. and 9
p.m.
- May not call you at work if they know
your employer disapproves of this practice.
- May not "harass, oppress, or abuse
you".
- May not deceive you when collecting
debts. A debt collector, for example, may try to imply your actions are criminal when they
are completely legal.
- Must identify themselves when they call
you.
- Must stop contacting you if you request
it in writing.
Whatever your credit or debt situation may be, you'll find a wealth of information in
todays' credit laws -- they offer protection and assistance at a time when you need it the
most.
Credit and Debt Calculators:
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• Should I pay off debt or
invest in savings?
• What will it take to pay off my balance?
• How important is the
interest rate?
• Should I consolidate my
credit cards? |
