Know Your Credit Rights

How the Law Protects You and Your Credit

Know Your Credit Rights
January 16, 2017

In matters pertaining to credit, do you feel like it's you against the world? Sometimes we all feel that way, but in reality, there are rules and regulations to help protect you against credit discrimination, abuse, or improper handling of your information. Consider these four important laws that help protect your credit rights.

  • Equal Credit Opportunity Act (ECOA) – Enacted in 1974, the ECOA is intended to keep credit equally available to all qualified applicants. It prevents creditors from discriminating against any credit applicant on the basis of religion, race, color, sex, national origin, age, marital status, or receipt of public assistance. The Consumer Financial Protection Bureau (CFPB) was given authority over ECOA by the 2010 Dodd-Frank legislation.

If you feel your rights have been violated under the ECOA, contact the CFPB or your state Attorney General's office to report the discrimination.

  • Fair Credit Billing Act (FCBA) – The FCBA applies to credit cards and similar open-ended credit sources, but not to installment payments like auto loans. It allows consumers to dispute erroneous charges and hold payments without any damage to credit reports. FCBA also covers credit card holders from liability in the case of fraudulent charges on their cards through data breaches or stolen credit card information.

However, to use the FCBA's protection it is important to act quickly. You must report erroneous charges within sixty days after the bill containing the erroneous charge was mailed to you. Your complaint must be mailed directly to the card issuer. The card issuer must acknowledge receipt of your complaint within thirty days and resolve it within the next two billing cycles. If your complaint is upheld and corrected, any accrued interest is also removed.

When the issue results from lost cards or stolen card information, disputes can be phoned in and the sixty-day limit does not apply.

  • Fair Credit Reporting Act (FCRA) – Basic handling of your credit information is covered under the FCRA. Credit reporting agencies and all sources that collect and report your credit activities to the agencies are required by the FCRA to make sure that your information is fair, accurate, and secured. They must provide the information in your file upon request, although they are not required to do so for free. However, you can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.

When information in your credit file has been used to deny your credit application, the creditor must inform you of that fact and provide the contact information on the agency providing that information. This also applies to denials of insurance or employment.

  • Electronic Fund Transfer Act (EFTA) – The EFTA targets protection of financial transactions processed by electronic means. While it is targeted primarily at banking operations such as ATMs, debit cards, and direct deposits, it also applies to credit card transactions where electronic funds transfer features apply.

When you are faced with abuse of your credit, remember that these regulations have your back — but they cannot help you if you do not use them. Understand your credit rights so that when the time comes to put the power of these regulations to work for you, you know what to do.

If you believe there is a mistake on your credit report, you can resolve it with a single click using our credit correction service.


Photo ©iStockphoto.com/AndreyPopov

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