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Consumer Credit Laws That You Need to Understand

Most consumers are oblivious of the laws that are supposed to protect them when dealing with debts, credit cards, and most importantly, credit score. Many only centers their focus on using credit cards in a better way and forgetting about their legal rights. For instance, consumers in the US are protected by the following legal acts and organizations:

  •             Consumer Credit Protection Act (CCPA) (1968)
  •             Fair Credit Reporting Act (FCRA)
  •             Fair and Accurate Credit Transactions Act (FACTA) (2003)
  •             Equal Credit Opportunity Act (ECOA)
  •             Truth In Lending Act (TILA)
  •             Credit Repair Organizations Act (CROA)

These are just a few of the laws that you need to know as a consumer. These insights will not only help to raise your credit score in the best environment possible but will also sort out any discrepancies in the fairest way possible. Just to make sure that every consumer understands them well, let us dive into each one of them in detail.

Consumer Credit Protection Act

This is one of the oldest acts in the US. Its goal is to protect all the consumers against any credit dealings that are not legal or fair. Thus, it emphasizes honesty and fairness from the organizations and shareholders who deal with credit ratings. This includes the lenders, who should submit the report about credit accounts, and credit reference bureaus, who are supposed to assign the three-digit credit score number. As a consumer, you have a right to be protected from unfairness by the law.

Fair Credit Reporting Act

Today, many people are worried about how their information will be used by the agencies collecting them. We all know that credit history and related data are sensitive and confidential. Luckily, the FCRA protects consumers against this. Just like other acts, it obliges the major credit bureaus to offer a report to the consumers so that they can review whether it is accurate or not. According to the Boostcredit101 website, this is one of the most important legal rights that consumers have. Thus, they need to understand it to make a claim.

Fair and Accurate Credit Transactions Act

This is a consumer credit law that seeks ensures fairness when seeking any credit like a mortgage. Since most people will need such services at one time or another, it is crucial to understand everything about it. According to the act, it is a legal right for the citizens to get a report about their credit once a year. This cuts across all of the credit bureaus in the US. Notably, the act also puts forward a better framework to deal with fraud that affects consumers like identity theft. And the best part is that this is the responsibility of the lenders according to the act.

Equal Credit Opportunity Act

If you ever meet a lender who discriminates you because of issues that are not related to finances, then this is the legal act that will protect you. Lenders are only obliged to deny or reduce credit amount based on issues like credit history, financial income, and other finance-related matters. According to this act, it is illegal to go further than this.

Truth In Lending Act

A truth in lending statement is usually offered when you apply for major credit like a mortgage. It is part of the contract and shows the minimum information that you are entitled to when borrowing a loan. Basically, these are like the terms and conditions of the loan, which states the amount you will get and how much you will pay per month. Legally, this binds both the lender and the person applying for a loan. They cannot change the figures unless both enter into another agreement that must be signed again.

Credit Repair Organizations Act

When you go out to seek the services of credit repair agencies, there are legal procedures that they must follow. The first one is that they can only give the correct information when negotiating with the lenders. Anything else is not supposed to be said. It also requires the agencies to enter into a written contract with you before they start the process.

As a closing remark, it is important to check all legal procedures that protect you as a consumer when dealing with credit matters. It is the only way to guarantee a high score that is accurate. Further, you will always get the financial help that you deserve.

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