How to Understand Consumer Credit Laws

Consumer credit laws set standards governing the right of every consumer to obtain and use credit, and to maintain an accurate credit rating. Here's how it works.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Computer with Internet access

1. Understand your rights. The Fair Credit Reporting Act stipulates that information in a consumer's credit report must be accurate and confidential. Under this law, you have the right to file a dispute with the credit reporting agency if your report contains errors. If the dispute isn't resolved to your satisfaction, the Act lets you add a summary explanation regarding the matter to your credit report.
2. Resist discrimination. Under this act, creditors may not discriminate based on sex, race, marital status, religion, national origin or age. They also may not discriminate against anyone on public assistance.
3. Contest all errors. This act gives you the right to dispute incorrect charges made to your credit card account. It also states that your credit rating cannot be affected when you exercise this right.
4. Know the extent of your rights. This Act governs all personal, family and household debts and makes it illegal for debt collectors to employ deception or abuse in the collection of debts. Debt collectors aren't allowed to make collection calls before 8 a.m. or after 9 p.m. Also, debt collectors aren't allowed to call you at work if you've asked them not to.
5. Take action. If you feel your rights have been violated, file a complaint with the Federal Trade Commission (see Resources below). You also choose to gather bills, statements and other evidence proving the alleged wrongdoing and present your case to an attorney experienced in consumer law.
6. Catch credit issues early by checking your credit report at least once a year. Consumer credit laws state that you're entitled to one free credit report annually.
7. Learn more about consumer credit laws at the Federal Trade Commission Web site (see Resources below).

Tips & Warnings

• Understand that your credit worthiness hinges on your credit report. This report details a host of personal information, including your bill payment history.