Many consumers choose to begin seriously managing their finances around the first of the year. Those who are looking to get out of debt and raise their credit scores should know and understand the laws that are in place to protect consumers and to help them to manage and protect their personal credit.
The Fair Credit Reporting Act is designed to assist consumers when it comes to protecting their credit. The FCRA mandates that all consumers are entitled to one free copy of their credit report each year from all three of the major credit bureaus. These three bureaus, Transunion, Equifax and Experian, all have websites set up where a consumer can request this free annual credit report. Obtaining copies of all three reports allows consumers to ensure that all information is valid and to see what may be harming their credit scores.
Using these credit reports also allows consumers to dispute any information that they find that is not correct. Credit bureaus are required by law to respond to any disputes or complaints by conducting an investigation into the dispute. These investigations typically take 30 days to complete. If the dispute is found to be valid then changes should be made to the consumer’s credit report. For instance, if a consumer finds that an amount to a creditor is listed wrong on the report, the bureau will need to change it to the proper amount.
There are other situations when consumers may be able to access their personal credit reports without cost. If a consumer suspects that they have been the victim of identity theft, has recently been turned down for credit or is unemployed and will be looking for work within 60 days, credit bureaus are mandated to provide credit reports at no charge to the consumer.
The Fair Debt Collection Practices Act ensures that collectors and/or debt collection agencies do not resort to illegal or otherwise wrongful practices in an attempt to collect a debt. Consumers should be very aware of what constitutes wrongful or illegal acts so that they can protect themselves from harassment by creditors. If a collector violates this Act, the consumer should file a complaint with the Federal Trade Commission as quickly as possible.
Finally, the Credit CARD Act helps to protect credit card holders. CARD stands for card accountability, responsibility and disclosure. This Act is designed to protect consumers by ensuring that credit card companies follow certain guidelines. A credit card company for instance cannot implement changes without first giving card holders a notice of no less than 45 days. This goes for interest increases as well. Under this Act, credit card companies are no longer permitted to use a double-cycle billing technique or a universal clause. Complete disclosure of all fees associated with the card holder’s account must be provided to the consumer.
These laws are meant to protect consumers and assist them in maintaining a good credit score. If and when a consumer feels that a creditor has violated one of the practices mandated by these laws, he or she should immediately file a complaint with the FTC.
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