Know Your Rights

When credit bureaus first started operating, they answered to no one, particularly individuals like you and I that wanted to know why we were rejected for a loan, or what was in our credit reports.
And the same kind of ruthlessness was demonstrated by collection agencies.

Fortunately our government took action by creating the below Acts:

The Fair Debt Collection Practices Act (FDCPA)

http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm

The FDCPA was created to:

The Fair Credit Billing Act (FCBA)

http://www.ftc.gov/bcp/conline/pubs/credit/fcb.htm

The FCBA was created to help consumers legally resolve billing disputes. The FCBA applies to "open end" credit accounts like credit cards, and revolving charge accounts like department store credit cards.

It does not cover installment contracts - loans or extensions of credit you repay on a fixed schedule. Consumers often buy cars, furniture and major appliances on an installment basis, and repay personal loans in installments as well.

The FCBA can help consumers resolve the following types of "billing errors":

• unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50;
  
  
• charges that list the wrong date or amount;
  
  
• charges for goods and services you didn't accept or weren't delivered as agreed;
  
  
• math errors;
  
  
• failure to post payments and other credits, such as returns;
  
  
• failure to send bills to your current address - provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and
  
  
• charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.
  

These errors can be corrected. Just like improving your credit, It takes a little patience and knowledge of the dispute settlement procedures provided by the Fair Credit Billing Act (FCBA).

You must submit your dispute in writing and it must be acknowledged by the creditor within 30 business days unless the problem has been resolved. During the dispute period:

• You may withhold payment.
  
  
• The creditor cannot report negative information to the credit bureaus.

Other interesting facts:

• Creditors must record payments the day they are received. Failure to do so cannot negatively effect consumers.
  
  
• You can sue a creditor that violates the FCBA.
  
  
• To file a complaint or to get free information on consumer issues, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/.

[back to top]

Equal Credit Opportunity Act (ECOA)

http://www.ftc.gov/bcp/conline/pubs/credit/ecoa.htm

The Equal Credit Opportunity Act (ECOA) ensures all consumers are given an equal chance to obtain credit. This doesn't mean all consumers who apply for credit get it. Factors such as income, expenses, debt, and credit history are taken into account.

The ECOA protects you when you deal with any creditor who regularly extends credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Anyone involved in granting credit, such as real estate brokers who arrange financing, is covered by the law. Businesses applying for credit also are protected by the law.

I was able to summarize the other Acts and provide you with my interpretation. However, there was not much summarizing I could do with the ECOA, so I have included almost of the complete text below. What's not included is how to file complaints. Please visit the ECOA website by clicking on the link I provided above if you need to file a complaint.

When You Apply For Credit, A Creditor May Not...

• Discourage you from applying because of your sex, marital status, age, race, national origin, or because you receive public assistance income.

• Ask you to reveal your sex, race, national origin, or religion. A creditor may ask you to voluntarily disclose this information (except for religion) if you're applying for a real estate loan. This information helps federal agencies enforce anti-discrimination laws. You may be asked about your residence or immigration status.

• Ask if you're widowed or divorced. When permitted to ask marital status, a creditor may only use the terms: married, unmarried, or separated.

• Ask about your marital status if you're applying for a separate, unsecured account. A creditor may ask you to provide this information if you live in "community property" states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. A creditor in any state may ask for this information if you apply for a joint account or one secured by property.

• Request information about your spouse, except when your spouse is applying with you; your spouse will be allowed to use the account; you are relying on your spouse's income or on alimony or child support income from a former spouse; or if you reside in a community property state.

• Inquire about your plans for having or raising children.

• Ask if you receive alimony, child support, or separate maintenance payments, unless you're first told that you don't have to provide this information if you won't rely on these payments to get credit. A creditor may ask if you have to pay alimony, child support, or separate maintenance payments.
  

When Deciding To Give You Credit, A Creditor May Not...

• Consider your sex, marital status, race, national origin, or religion.

• Consider whether you have a telephone listing in your name. A creditor may consider whether you have a phone.

• Consider the race of people in the neighborhood where you want to buy, refinance or improve a house with borrowed money.

• Consider your age, unless:
  
  • you're too young to sign contracts, generally younger than 18 years of age;
    
  • you're 62 or older, and the creditor will favor you because of your age;
    
  • it's used to determine the meaning of other factors important to creditworthiness. For example, a creditor could use your age to determine if your income might drop because you're about to retire;
    
  • it's used in a valid scoring system that favors applicants age 62 and older. A credit-scoring system assigns points to answers you provide to credit application questions. For example, your length of employment might be scored differently depending on your age.

When Evaluating Your Income, A Creditor May Not...

• Refuse to consider public assistance income the same way as other income.
  
• Discount income because of your sex or marital status. For example, a creditor cannot count a man's salary at 100 percent and a woman's at 75 percent. A creditor may not assume a woman of childbearing age will stop working to raise children.
  
• Discount or refuse to consider income because it comes from part-time employment or pension, annuity, or retirement benefits programs.
  
• Refuse to consider regular alimony, child support, or separate maintenance payments. A creditor may ask you to prove you have received this income consistently.
  
• You Also Have The Right To...
  
• Have credit in your birth name (Mary Smith), your first and your spouse's last name (Mary Jones), or your first name and a combined last name (Mary Smith-Jones).
  
• Get credit without a cosigner, if you meet the creditor's standards.
  
• Have a cosigner other than your husband or wife, if one is necessary.
  
• Keep your own accounts after you change your name, marital status, reach a certain age, or retire, unless the creditor has evidence that you're not willing or able to pay.
  
• Know whether your application was accepted or rejected within 30 days of filing a complete application.
  
• Know why your application was rejected. The creditor must give you a notice that tells you either the specific reasons for your rejection or your right to learn the reasons if you ask within 60 days.
  
• Acceptable reasons include: "Your income was low," or "You haven't been employed long enough." Unacceptable reasons are: "You didn't meet our minimum standards," or "You didn't receive enough points on our credit-scoring system." Indefinite and vague reasons are illegal, so ask the creditor to be specific.
  
• Find out why you were offered less favorable terms than you applied for-unless you accept the terms. Ask for details. Examples of less favorable terms include higher finance charges or less money than you requested.
  
• Find out why your account was closed or why the terms of the account were made less favorable unless the account was inactive or delinquent.
  

A Special Note To Women

If You Suspect Discrimination... A good credit history-a record of how you paid past bills-often is necessary to get credit. Unfortunately, this hurts many married, separated, divorced, and widowed women. There are two common reasons women don't have credit histories in their own names: they lost their credit histories when they married and changed their names; or creditors reported accounts shared by married couples in the husband's name only.

If you're married, divorced, separated, or widowed, contact your local credit bureau(s) to make sure all relevant information is in a file under your own name.

Buy Now!

[back to top]