Credit is valuable. The importance of how much credit you have and how you use it goes far beyond shopping. Whether you have good or poor credit can affect where you live and even where you work, because your credit record may be considered by prospective employers. That is why you need to understand how credit is awarded or denied and what you can do if you are treated unfairly. The major laws that regulate credit are outlined below;
The Three Major Credit Agencies
P. O. Box 2002
Allen, TX 75013
P. O. Box 2000
Chester, PA 19022-2000
P. O. Box 740241
Atlanta, GA 30374
You have the right to have a free report from any of these three credit agencies every 12 months. For a free report from Experian, TransUnion and Equifax, go to: http://www.annualcreditreport.com
Credit, Credit Reporting & Credit Repair Regulations:
FCRA Fair Credit Reporting Act:
The Fair Credit Reporting Act promotes the accuracy and privacy of information in consumer credit reports. It also controls the use of credit reports and requires consumer reporting agencies to maintain correct and complete files.
According to this act, you have a right to review your credit report and to have incorrect information corrected.
CROA Credit Report Organization Act:
Designed to ensure that those seeking credit repair services from credit repair organizations are provided with information necessary to make an informed decision regarding the purchase of credit repair services and that consumer are protected from deceptive or unfair advertising and business practices.
FCBA Fair Credit Billing Act:
The Fair Credit Billing Act provides for the prompt correction of errors on open-end credit accounts (department store credit accounts, for example) and protects consumers’ credit ratings while they are settling disputes.
Under this law, if a consumer is disputing a charge, creditors cannot report the consumer’s account as delinquent. This applies to open-end credit instruments, such as credit cards, revolving charge accounts, and overdraft checking. Consumers who question an item are responsible for notifying the creditor in writing within 60 days of receiving the bill. The creditor must acknowledge the notice within 30 days and may not do anything to damage the consumer’s credit rating while the item is in dispute.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act promotes the fair treatment of consumers by prohibiting debt collectors from using unfair, deceptive, or abusive practices.
This act applies to professional debt collectors who collect on loans they did not originate. Though it technically does not apply to banks, department stores, and other lenders who collect their own debts, no reputable lender is permitted to use such practices.
1. Debt collectors are permitted to contact people other than the debtor only to locate the debtor or make a reasonable effort to communicate with the debtor about the debt.
2. After making contact, debt collectors are required to send written notice informing the debtor of the amount of the debt, the name of the creditor, and the fact that the debt will be considered valid unless disputed within 30 days.
3. Debt collectors are prohibited from harassing, oppressing, or being abusive in collecting a debt. This includes using threats or obscene language, publicizing the debt, making annoying or anonymous telephone calls, and misrepresenting the identity of the collector, the status of the debt, and the consequences if it is not paid.
If debt collectors violate the Fair Debt Collection Practices Act, consumers can sue for actual and punitive damages.
ECOA Equal Credit Opportunity Act:
The Equal Credit Opportunity Act requires that individual creditors apply credit standards in a fair manner, so that all consumers are given an equal chance to obtain credit. It does not require all creditors to have the same standards, nor does it guarantee approval of loan applications.
In reviewing your credit application, lenders cannot discriminate on the basis of sex, marital status, race, religion, national origin, age, income from assistance programs, or if you exercise your rights under the Consumer Protection Act. The only acceptable criteria are your ability and intent to repay funds borrowed.
FDCPA The Fair Debt Collection Practices Act:
Sets out guidelines and procedures for collections companies that prevents debt collectors from using unfair or deceptive practices to collect overdue bills.
Specialty Consumer Reporting Agencies
You should be aware of other reporting agencies that are becoming more widely used. Some examples are:
Checking Accounts – ChexSystems, Telecheck, SCAN
Employment – ChoiceTrust Employment Reports
Insurance – ChoiceTrust-Auto-Personal Property Reports
Medical Information – Medical Information Bureau (MIB)
Rental Information – Accufax, American Tenant Screen, ChoicePoint Tenant History, National Tenant Network, Tenant Data Services Mortgage Financing – Innovis