Before you attempt to start repairing your credit, you will want to learn more about the four laws that help you repair your credit against unfair debt collection practices, and creditors that aren’t following the rules.
By knowing your rights, you are equipping yourself with the knowledge and power that it takes to remove inaccurate information that your creditors or that 3rd party debt collectors have placed wrongfully on your credit report(s).
While law school isn’t a requirement to be able to successfully remove inaccurate information, it does help to know what the law says, and in the case of your credit, you’ve got 4 different laws that protect you on the books from having to live through 7 to 10 years of inaccurate information staying on your credit reports.
The Fair Credit Reporting Act:
The fair credit reporting act, otherwise knows as the FCRA is the primary law that protects consumers against erroneous information appearing on their credit reports. While the FCRA is made up of many rules and policies, the primary rule that is the most relevant in disputing inaccurate information on your credit reports, is the rule that all information placed on your credit reports by your creditors must be able to be verified for accuracy.
If an item appears on your credit report that is inaccurate, verifying the accuracy of that item is the first step that should be taken in order to get the information removed. Legally, the bureau has to remove the item if it can not be verified, and if for some reason it’s put back on your credit report(s) then they have to tell you 5 days before they place it back on your credit reports.
Additionally, the Fair Credit Reporting Act determines and sets the timeline for how long an item whether positive or negative can stay on your credit reports. While hard inquiries can stay on for up to 2 years, most negative items on your credit reports can legally stay on your credit reports for up to 7 years with the exception of a bankruptcy filing which can legally stay on your credit reports for 10 years.
Under the FCRA, creditors, collection agencies, courts and employers both past and present are bound to adhere to the laws set forth in the sections that make up the FCRA that clearly outline that all information that is reported MUST be complete and accurate, and any and all claims that arise from potentially incorrect information must be looked into, verified, and if necessary, corrected within 30 days.
Additionally, under the FCRA a creditor has to notify you in writing when a negative item is added to your credit reports. While it isn’t necessary for them to notify you prior to it being done, it does need to be done within 30 days from the time that it has been placed on your credit report(s).
Lastly, under the FCRA, if a company or prospective client that you want to do business with either rejects your application or charges you more in security deposits and or interest depending on the type of company it is, that company or creditor needs to notify you within 30 days of the date of your application and their decision which credit report they received the information from, so that you can legally ensure that the information that they pulled is, in fact correct.
The Truth In Lending Act:
The Truth in lending act, otherwise known as the consumer credit protection act covers disclosures, rates and terms for the finance industry making sure that there is a set and structured way to calculating finance charges, interest rates, and home loan rates and terms. While the law does not regulate how much a creditor can charge what it instead does is mandate that brokers, lenders, and all companies that offer credit based financing of any kind disclose their charges in a way that you as a consumer can easily understand.
If you’ve ever seen advertisements for credit cards that look similar to “1st 12 months 0% interest and after APR’s at 17%, the truth in lending act is why those rates, and terms are being highlighted to you, to begin with. Brokers, Lenders, Banks, and Mortgage companies that do not disclose this information to you are not in compliance with the truth in lending act, and are not legally advertising their products.
The Fair Credit Billing Act:
The Fair Credit Billing Act, while technically being written alongside and as a part of the Truth in Lending Act serves as a protective measure against unfair billing practices and lays out the correct way in which invoices and bills should be correct. If you are working to dispute a debt on an account it’s often as a result of one of the following scenarios:
- The amount you were charged is incorrect.
- You were charged for something you didn’t purchase.
- You weren’t credited for payments made and made on time.
- Statements were sent to the incorrect address or not sent at all.
- You never received the items that you paid for.
- Additional fees or charges were tacked on that don’t add up (erroneous charges for storage at a car repair shop for BEFORE the vehicle was even worked on as an example) .
While creditors allow you to often dispute charges online, the best way to address a dispute of this nature is to send a letter (usually certified return receipt) that requests verification and legitimacy of the charges.
Important Things You Should Know About The Fair Credit Billing Act:
- The Creditor has to acknowledge that they’ve received your letter within 30 days of receiving the letter.
- The creditor then has 90 days to either make the corrections or tell you why they aren’t going to. (If they turn you down, you have the right to request all the creditor’s documentation proving there is no error)
- The letter of request that you send to the creditor needs to be sent to their billing inquiries address and not their payment address (if the two are different).
The Fair Debt Collection Practices Act:
Consumers often find that they are bombarded with harassing calls, emails, and even messages even past the point where they have questioned the validation of alleged debts that they owe. The fair debt collection practices makes many of these harassing practices illegal including:
- Contacting you after you’ve requested a validation of the debt
- Calling you after 9pm or before 8am local time.
- Non stop calling to make contact with you.
- Reporting or threatening to report false information to credit bureaus.
- Calling you when the collector knows you are working with an attorney.
- Contacting you at work.
- Talking with people other than your spouse or attorney about the collection.
- Sending debt postcards, publishing your name to a bad debt list, or putting something embarrassing on any letter that is sent to you.
- Using abusive or forceful language that could be seen as threatening.
- Attempting to collect higher amounts than what is actually owed.
- Misrepresenting themselves such as saying they are attorney’s or police when they are not.
Legally, debt collectors are under an obligation to:
- Identify themselves and disclose that any information that you provide them can and will used to collect the debt.
- Give you the name and contact information for the original creditor if you request that information in writing.
- If a lawsuit is filed against you, it needs to be filed where you lived or where you signed the contract.
- They must disclose and provide you with a formal notice that you can dispute the alleged debt in writing, and further must disclose where you should send that verification / dispute.
- If you make a written request for verification of the alleged debt owed, the law says that they are obligated to verify that debt and provide you with that information in writing or they must stop the collection process completely.
Credit Repair & The Law In Conclusion:
Just like many other laws, the four that we’ve outlined above were designed and created to protect consumers and to prevent inaccurate and sometimes fraudulent information from appearing on your credit reports, and ruining your good name, credit, and short or even long term goals. Consumers will often find that neither the credit bureaus or the creditors want to play by the rules, and therefore if the above laws do not get companies and or creditors to back off, assistance from an experienced credit repair or debt resolution company may be exactly what is needed in order to stop collection companies, and creditors from continuing bad practices that are in-fact illegal under the four above mentioned laws.
Book a free 30 minute consultation with us now if you believe you may need to retain a credit repair or debt resolution service and we’ll outline a plan for you today that’s in your best interest dependent upon your unique circumstances.