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Finance

Your credit rating and your credit rights

by Wayne Wargo (PenWay.org)

When dealing with moneylenders, it is of great importance that you are aware of your consumer rights. All lenders have to comply with the same credit standards as set forth in The Equal Credit Opportunity Act. This act was passed in 1974 and is monitored by The Federal Trade Commission. Each and every consumer is given the same chance to obtain credit. Consumers who apply for credit are not automatically approved. There are considerations that factor into the decision such as income, expenses, debt, and overall credit history.

These standards apply to all consumers no matter what their race, sex, marital status, national origin, religion, age, or public assistance program that is involved. This does not say for sure that the loan will be approved or that credit will be given to you. The only good measurement for creditors to use as a rule of thumb is your ability to pay the debts that you owe.

The applications that you have to complete will have questions about some of the subjects in the above paragraph. However, please note that you are not required to answer them on an application for credit. These may be asked because of the fair housing laws or affirmative action laws but these are at your discretion. You should not be asked about your marital status, unless your partner will help you secure the loan. You may be asked your age because of the Equal Credit Opportunity Act, but only to determine if you are old enough to have the credit. This means that you have to be over the age of 18 in the U.S.

Creditors must inform any applicant of their decision within 30 days. If an application was not approved, then the creditor has to provide a written statement that contains the full details of this outcome or decision along with the reason for the denial and the information on the applicant's rights. This act will help to seal for certain it is kept with all applications for credit no matter who the applicant is.

The Fair Credit Reporting Act will also give people the right to see their credit report. To make this better, everyone is entitled to a free credit report every 12 months. This act will help people to receive their credit history for all three national credit-reporting agencies. When you are reviewing your credit report, you can dispute items on the it and this will allow the consumer to control some of what the credit reporting agencies have that is negative. After you review your credit and if the correction to your report is not right, you can add a statement of 100 words or less to help clarify the item that you want disputed.

The Fair Credit Reporting Act was passed in 1970 in order to uphold the accuracy and privacy of a person's private information in the credit report. It was passed with the intention of preventing identity theft, which has become more popular in recent years. By reviewing one's credit report each year, he or she will be able to determine if any kind of identity theft has happened.

The importance of both of these acts is no small matter. They were passed to protect the consumer, and rightfully so. These acts were passed for your protection to allow you to review your credit history and see that it is accurate. Understanding these laws and taking safeguards to protect you and your family should help in securing a stable financial future.

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