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Credit Education & Information

What laws protect me as a credit consumer?

As a credit consumer you must understand your legal rights. Congress enacted a law to protect consumers from unfair credit practices with the (CCPA) Consumer Credit Protection Act. This law regulates collection agencies, creditors and credit-reporting bureaus, therefore, preventing credit discrimination as well as providing consumer credit protection.

How does this Fair Credit Report Act protect you?

This is defined by placing rigid laws of how to deal with the consumer including responsibilities of credit reporting and creditors. The law ensures the consumers have a right to their credit file, including guarantees the privacy of that information as well.

Some of your rights as a credit consumer under the FCRA also include:

• The right to have access to your credit information (without any medical information) available in your file with any of the reporting bureaus.
• The right - to know the name of the bureau that issued a report used to deny you employment, insurance, or credit because of that credit report
• The right to dispute the information on your credit report which, includes investigations made by the credit bureau within 30 days..
• The right to have erroneous or inaccurate information removed from your credit file.
• The right to know identity of the person or person's that requested a copy of your credit report in the past 6 months.
• The right to include a short statement (addressing your issues) on your credit report.
• The right to have negative information removed from your credit report after the allotted time period.

How does the Fair Credit Billing Act protect me as a credit consumer?

The Fair Credit Billing Act protects credit consumers against inaccurate, unfair billing and credit card practices.

Some of your rights under this law are:

• The right to challenge in writing any creditor's billing statement or the amount of that billing statement
• The right to have the creditor respond within 30 day's from their receipt of your notice.
• The right to have a creditor either correct the account or show proof that the account has been investigated and verified within 90 days of notice.
• The right to have the creditor supply proof that your account has been corrected or proof that your debt was verified within 90 days of notice.
• The right, once you notify a creditor that you dispute a bill, not to have your account reported as delinquent for 100 days after receiving notice from you of the dispute.
• The right, if the account remains disputed after the lapsed statutory time, to force the creditor to report the account "in dispute".

What are the important provisions of the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act does not directly deal with credit, but rather specifies the permissible practices by creditors when dealing with debtors. The Fair Debt Collection Practice Act protects consumers from unfair and deceptive debt collection practices.

Some of your rights as a consumer under this law are:

• The right not to be abused, harassed, or deceived by debt collectors.
• The right that debt collector can only contact you before 8am or after 9pm.
• The right to have a debt collector identify himself when contacting you.
• The right to inform the debt collector in writing to no longer contact you and cease further communication.
• He/She must do so after informing you of whether any further actions should be taken.
• The right to an attorney – Basically not to communicate with any other person, and only communicate with you through your attorney, represents your right - if the debt collector has reason to discussing anything with you.
• The right within the statutory 30 day period to notify the collector, in writing, that you dispute the debt or request the name and address of the original creditor. Upon such notification, the creditor must cease all debt collection activities against you pending verification of the debt. Proof of verification must be mail to you by the debt collector.

What does the Equal Credit Opportunity Act cover?

Equal Credit Opportunity Act prohibits credit discrimination on the basis of race, color, religion, national origins, and marital status. Nor may you be denied credit because you are on public assistance or because you have exercised your rights under the Consumer Credit.

Some of your rights as a consumer under this law are:

• The right -if you are denied credit or have your credit revoked- to be informed by the creditor, in writing, of the specific reason for the denial.
• The right to join class action lawsuits against debt collectors.
• The right to sue in the Federal courts, any creditor who violates this law for actual and punitive damages..

How do I find banks that issue secured credit cards?

You do not need a local bank to get an unsecured credit card. Issuing banks are nationwide, . Visit our Apply for Credit Cards Link. Search for the credit card that's best for you, fill out the application and in some cases receive a credit decision within sixty seconds.

What is the difference between Secured and Unsecured Credit?

Secured credit is backed by collateral. You pledge an asset to the lender and if you fail to repay, the lender may sell your collateral. Because you have pledged collateral, the lender has less risk, and therefore secured credit is often the easiest credit to obtain. Mortgage or auto loans are the most common examples of secured credit.

With unsecured credit the lender extends you credit based upon your ability and willingness to pay. This is evidenced by your credit history. You do not pledge collateral and because no collateral is pledged, the lender has a greater risk of loss if you do not pay. Therefore, the lender must have more confidence in your ability and willingness to pay the debt. Unsecured credit is chiefly granted upon your credit history and current financial conditions. If you default, the lender must go to court and sue you. Therefore, only after the creditors obtain a judgment can it seize your assets to recover its money.

I can’t get a regular bank credit card because of my bad credit history. Do I have other options to get a bankcard?

If you cant get a an unsecured bank credit card, don’t give up. Even with poor credit you can get a secured credit card. Why a secured credit? Because banks extend credit in order to earn money. By pledging collateral to secure your credit line, the bank knows they will get paid. Search for the right credit card and get instant approval. Visit our Apply for Credit Cards Link.

Why would an employer want a credit check on an employee??

Employers oftentimes do credit checks to evaluate an employee’s (or prospective employee's) ability to handle their own finances. A credit history can also indicate the risk of theft or bribery, particularly if the employee has excess debt. Good credit is also a sign of stability, and a good rating may be necessary for an employee to be bonded. Under Federal law an employee must give an employer or prospective employer written consent for a credit check, but once this consent is granted, the employer can continuously receive future credit reports without further written authorization.

How is my FICO score determined?

Your FICO score is a numerical evaluation of your present creditworthiness. The credit score is compiled directly from both positive and negative entries in your credit report. The score is divided into five categories, allocated as follows:

1. Type of credit you use = 10%
2. Your credit history =35%
3. Amount you currently owe =30%
4. Length of your credit history = 15%
5. New credit obtained = 10%

What factor lowers your credit score?

Excessive delinquent accounts, slow pay, no pay, accounts turned over for collections. "Charged Off " The creditor has stopped pursuing collection and does not expect payment. Outstanding judgments, tax liens, foreclosures, repossessions or bankruptcy. An excess number of outstanding credit cards. (Which increases the likelihood of excessive debt.) Too many current accounts with high balances. Regardless of your ability to pay, lenders see this as a potential problem. Failure to significantly reduce loan balance. Your debt level is too high in relation to your total credit limit. Debt should be kept at 30% of total amount of credit Ex: $100 dollars debt $ 30 dollars.

I have several old and relatively inactive accounts on my credit history. Will it help or hurt my FICO score to close these accounts. ??

Don’t close old accounts that are in good standing. It will hurt your credit rating because it shortens your credit history and thus decreases your average account age. When you close these accounts you also lower your available credit, which correspondingly increases your debt to credit limit. This will LOWER your FICO score.

Should I then open more credit lines to spread my debt and reduce my debt to credit limit?

Opening too many accounts is another way to damage your FICO score. You want no more than FIVE to SEVEN open credit lines at any given time.

How should I protect my credit in the event my spouse and I divorce?

Begin by removing your name from any joint accounts that you may share. Then directly notify each creditor of your divorce or separation, and advise the creditor that you shall no longer be responsible for any future indebtedness incurred by your spouse. It may also be worthwhile to publish in the newspaper legal notices that you disclaim liability for further obligations incurred by your spouse.

I am divorced and have re-adopted my maiden name. How do I transfer my credit history to my current name??

If you have had a credit history under another name you can transfer your credit history to your new name simply by notifying each of the credit bureaus, also provide your new address, etc. You should also directly contact your creditors of your name change.

What should I do if my identity is stolen?

Most importantly, move as fast as possible to detect the fraudulent use of your identity. If you suspect identity theft, immediately follow these next steps: Complete a police report; keep copies to later use with creditors and credit bureaus. Close all unnecessary credit card and charge accounts. Notify your credit cards companies, banks and others where you have charge privileges to stop further credit transactions. Notify Equifax / TransUnion / Experian. Request that your report be " Flagged " with a FRAUD ALERT.

Who are the three major credit bureaus?
Experian Credit Information Service (formerly TRW)
PO Box 2104
Allen, TX 75013-2004
www.experian.com
Tel .888 397-3742


TransUnion
PO Box 1000
Chester, PA 19022-1000
www.tuc.com
Tel. 800 916-8800


Equifax
PO Box 740241
Atlanta, A 30374-0241
www.equifax.com
Tel. 800525-6285


What should I do if my income is too low to pay my credit cards in full or on time?

Give priority to the credit cards with the highest interest rates. Once these credit cards are fully paid, you can pay those cards with the next highest interest. (APR)

If I can't temporarily pay my credit card, can I ask the bank to suspend the card rather than cancel the card??

YES! And most banks will suspend your credit card for between six months and one year until you pay down what you owe them. This can avoid a negative entry and returns the card to you that otherwise would have been cancelled.

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