creit and your consumer rights
A good creit rating is very important. Businesses inspect your creit history when they evaluate your applications for creit, insurance, employment, and even leases. Based on your creit payment history, businesses can choose to grant or deny you creit provided you receive fair and equal treatment. Sometimes, things happen that can cause creit problems: a temporary loss of income, an illness, even a computer error. Solving creit problems may take time and patience, but it doesn't have to be an ordeal.
The Federal Trade Commission (FTC) enforces creit laws that protect your right to obtain, use, and maintain creit. These laws do not guarantee that everyone will receive creit. Instead, the creit laws protect your rights by requiring businesses to give all consumers a fair and equal opportunity to receive creit and to resolve disputes over creit errors. This brochure explains your rights under these laws and offers practical tips to help you solve creit problems.
Your creit Report
Your creit payment history is recorded in a file or report. These files or reports are maintained and sold by "consumer reporting agencies" (CRAs). One type of CRA is commonly known as a creit bureau. You have a creit record on file at a creit bureau if you have ever applied for a creit or charge account, a personal loan, insurance, or a job. Your creit record contains information about your income, debts, and creit payment history. It also indicates whether you have been sued, arrested, or have filed for bankruptcy.
The Fair creit Reporting Act (FCRA) is designed to help ensure that CRAs furnish correct and complete information to businesses to use when evaluating your application.
Your rights under the Fair creit Reporting Act:
* You have the right to receive a copy of your creit report. The copy of your report must contain all of the information in your file at the time of your request.
* You have the right to know the name of anyone who received your creit report in the last year for most purposes or in the last two years for employment purposes.
* Any company that denies your application must supply the name and address of the CRA they contacted, provided the denial was based on information given by the CRA.
* You have the right to a free copy of your creit report when your application is denied because of information supplied by the CRA. Your request must be made within 60 days of receiving your denial notice.
* If you contest the completeness or accuracy of information in your report, you should file a dispute with the CRA and with the company that furnished the information to the CRA. Both the CRA and the furnisher of information are legally obligated to reinvestigate your dispute.
You have a right to add a summary explanation to your creit report if your dispute is not resolved to your satisfaction.
Your creit Application
When creitors evaluate a creit application, they cannot lawfully engage in discriminatory practices.
The Equal creit Opportunity Act (ECOA) prohibits creit discrimination on the basis of sex, race, marital status, religion, national origin, age, or receipt of public assistance. creitors may ask for this information (except religion) in certain situations, but may not use it to discriminate when deciding whether to grant you creit.
The ECOA protects consumers who deal with companies that regularly extend creit, including banks, small loan and finance companies, retail and department stores, creit card companies, and creit unions. Everyone who participates in the decision to grant creit, including real estate brokers who arrange financing, must follow this law. Businesses applying for creit also are protected by this law.
Your rights under the Equal creit Opportunity Act:
* You cannot be denied creit based on your race, sex, marital status, religion, age, national origin, or receipt of public assistance.
* You have the right to have reliable public assistance considered in the same manner as other income.
* If you are denied creit, you have a legal right to know why.
Your creit Billing and Electronic Fund Transfer Statements
It is important to check creit billing and electronic fund transfer account statements regularly. These documents may contain mistakes that could damage your creit status or reflect improper charges or transfers. If you find an error or discrepancy, notify the company and contest the error immediately. The Fair creit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) establish procedures for resolving mistakes on creit billing and electronic fund transfer account statements, including:
* charges or electronic fund transfers that you - or anyone you have authorized to use your account - have not made;
* charges or electronic fund transfers that are incorrectly identified or show the wrong amount or date;
* computation or similar errors;
* failure to reflect payments, creits, or electronic fund transfers properly;
* not mailing or delivering creit billing statements to your current address, as long as that address was received by the creitor in writing at least 20 days before the billing period ended;
* charges or electronic fund transfers for which you request an explanation or documentation, due to a possible error.
The FCBA generally applies only to "open end" creit accounts - creit cards, revolving charge accounts (such as department store accounts), and overdraft checking accounts. It does not apply to loans or creit sales that are paid according to a fixed schedule until the entire amount is paid back, such as an automobile loan. The EFTA applies to electronic fund transfers, such as those involving automatic teller machines (ATMs), point-of-sale debit transactions, and other electronic banking transactions.
Your Debts and Debt Collectors
You are responsible for your debts. If you fall behind in paying your creitors or an error is made on your account, you may be contacted by a "debt collector." A debt collector is any person, other than the creitor, who regularly collects debts owed to others. This includes lawyers who collect debts on a regular basis. You have the right to be treated fairly by debt collectors.
The Fair Debt Collection Practices Act (FDCPA) applies to personal, family, and household debts. This includes money owed for the purchase of a car, for medical care, or for charge accounts. The FDCPA prohibits debt collectors from engaging in unfair, deceptive, or abusive practices while collecting these debts.
Your rights under the Fair Debt Collection Practices Act:
* Debt collectors may contact you only between 8 a.m. and 9 p.m.
* Debt collectors may not contact you at work if they know your employer disapproves.
* Debt collectors may not harass, oppress, or abuse you.
* Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.
* Debt collectors must identify themselves to you on the phone.
* Debt collectors must stop contacting you if you ask them to in writing.
Solving Your creit Problems
Your creit report influences your purchasing power, as well as your chances to get a job, rent or buy an apartment or a house, and buy insurance. A history of timely creit payments helps you get additional creit. Accurate negative information can stay on your report for seven years. A bankruptcy can stay on your report for 10 years. If you are having problems paying your bills, contact your creitors at once. Try to work out a modified payment plan with them that reduces your payments to a more manageable level. Don't wait until your account has been turned over to a debt collector.
Here are some additional tips for solving creit problems:
* If you want to contest a creit report, bill or creit denial, contact the appropriate company in writing and send it "return receipt requested."
* When you contest a billing error, include your name, account number, the dollar amount in question, and the reason you believe the bill is wrong.
* If in doubt, request written verification of a debt.
* Keep all your original documents, especially receipts, sales slips, and billing statements. You will need them if you dispute a creit bill or report. Send copies only. It may take more than one letter to correct problems.
* Be skeptical of businesses that offer instant solutions to creit problems.
* Be persistent. Resolving creit problems can take time and effort.
* There is nothing that a creit repair company can do for you - for a fee - that you cannot do for yourself for little or no cost.
If you can't resolve your creit problems yourself or if you need help, you may want to contact a creit counseling service. Nonprofit organizations in every state counsel consumers in debt. Counselors try to arrange repayment plans that are acceptable to you and your creitors. They also can help you set up a realistic budget. These services usually are offered at little or no cost.
Universities, military bases, creit unions, and housing authorities also may offer low- or no-cost creit counseling programs. Check the white pages of your telephone directory for a service near you.
