Know Your Rights

The credit reporting system is complex and is often difficult for consumers to navigate. There are a number of laws designed that give consumers specific rights, including the Fair Credit Billing Act (FCBA), the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA). But many are either unaware of them or unable to effectively claim them. Credit repair professionals can help, but it is important for consumers to know their credit rights. 

The Fair Credit Billing Act

Errors on consumers credit reports are far too common. An FTC study in 2012 found that as many as 20% of all consumer credit reports contained mistakes. The FCBA establishes procedures for correcting those mistakes on consumer credit reports. In general, consumers can resolve errors on their credit reports in their favor for: 

  • Charges consumers have not made;
  • Charges that show the wrong date or amount;
  • Incorrect math;
  • Failure to post credits or payments promptly; and,
  • Failure to send bills or statements to the correct address. 

The Fair Credit Reporting Act

Beyond identifying and correcting errors, the FCRA gives consumers many rights of access to their credit report and underlying information in any adverse action taken against them, including:  

  • One free copy of your credit report per year from each of the three largest credit reporting agencies (CRAs), Equifax, Experian and TransUnion; 
  • A free copy of your report if you are unemployed and intending to seek employment within the next 60 days;
  • A free copy of your report if a company takes an adverse action against you, such as denying an application for credit, insurance or employment, including specific details of the information that led to the adverse action;
  • A full and complete copy of your credit report that contains all the information in your file at the time of your request—note that this report may not be free of charge. 

The Fair Debt Collection Practices Act

Harassment by debt collectors is one of the most consistent problems in our credit system. The FDCPA prohibits debt collectors from engaging in unfair, deceptive or abusive practices when attempting to collect a debt, including: 

  • Debt collectors may not harass or abuse you in any form;
  • Debt collectors may not use deception or lie in an attempt to collect a debt;
  • Debt collectors may only contact you at reasonable times, between the hours of 8AM and 9PM at your local time;
  • Debt collectors may not contact you at work if you inform them that your employer disapproves of such contact;
  • Debt collectors must cease contact with you if you ask them to do so in writing—note that this does not stop their actions to collect the debt or any penalties associated with it, only the contact; and,
  • Debt collectors must identify themselves and the source of the debt they are attempting to collect.