Credit laws and consumer protections are complicated. You don’t need to know every detail about these laws but you should definitely be familiar with your rights so know how to properly respond to issues that arise.

1. The Equal Credit Opportunity Act (ECOA)
2. The Fair Credit Reporting Act (FCRA)
3. The Fair Debt Collection Practices Act (FDCPA)
4. The Truth in Lending Act (TILA)
5. The Credit Repair Organizations Act (CROA)
6. The Fair and Accurate Credit Transactions Act (FACTA)
7. The Fair Credit Billing Act (FCBA)
8. Credit CARD Act 

The Equal Credit Opportunity Act (ECOA): 

The Equal Credit Opportunity Act (ECOA) prevents lenders from discriminating against people or businesses based on non-financial factors.

Top 3 tips on what you need to know about FCRA:

1 – You have the right to be not discriminated against

 A lender cannot discourage you from applying or discriminate against you based on factors that include:

• Race
• Color
• Religion
• Marital status
• Age (unless you’re too young to sign a contract)
• Whether the applicant receives public assistance

2 – You have the right to withhold information about your spouse

The ECOA limits the information lenders can ask about an applicant’s spouse only in certain situations, like a joint application, when you’re relying on your spouse’s income to pay the account, or applicants made in community property states. The lender isn’t allowed to ask whether an applicant is widowed or divorced. Only the terms married, unmarried, and separated can be used.

3 – You have the right to a written statement when denied credit

Under the ECOA, lenders are required to send an explanation to applicants whose application for credit is denied. The explanation must be made within 60 days of the decision and must include the specific reasons for the decision. 

The Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) protects your rights when it comes to credit reports and credit bureaus. What this means for you is that the information in your credit report must be accurate, fair, and private. 

Top 3 tips on what you need to know about FCRA:

1 – You have the right to know what is in your credit reports.

FCRA requires that credit reporting agencies provide you with a free credit report every 12 months.

You are also entitled to a free file disclosure if: (a) adverse action has been taken against you as a result of what is in your credit report; (b)you are a victim of identity theft; (c) your file has inaccurate information due to fraud; (d) you are unemployed and expect to apply for employment within 60 days, and (e) you are on public assistance.

2 – You have the right to know if adverse action has been taken against you.

If your file has been used to take adverse action against you, then you must be notified of such action. You must also be provided with the name, address, and phone number of the agency that was provided the information.

3 – You have the right to dispute errors in your credit report.

You can dispute incomplete or inaccurate information, and request the information be deleted or corrected.  In order to do this, you must contact the credit bureau or the party who provided the incorrect information to the credit bureau. 

Your dispute must be investigated within 30 days, and the credit bureau must correct or delete inaccurate, incomplete, or unverifiable information. Upon completion of your investigation, the credit bureau must provide their findings in writing and a free copy of your report if there is a change due to your dispute.  This report does not count as your free annual report.

The Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) doesn’t pertain to your credit directly, but it governs what third-party debt collectors (who do have some impact on your credit) can do when they’re collecting a debt from you.

Top 3 tips on what you need to know about FDCPA:

1 – You have the right to keep your debts private

If a debt collector contacts someone you know—a friend or family member—to get information about you so they can contact you, the collector isn’t allowed to reveal that they’re collecting a debt. 

2 – You have the right to stop debt collectors from contacting you

The FDPCA defines when debt collectors can contact you—between the hours of 8 a.m. and 9 p.m. unless you’ve given them permission to call you at another time. You can stop debt collectors from calling you by sending them a written cease and desist letter letting them know that you want their calls to stop.

3 – You have the right to not be harassed by debt collectors 

When they’re collecting a debt from you, collectors cannot make false statements, threaten you, harass you, call you repeatedly to annoy you or threaten to take any legal action that they’re not allowed to make or that they do not intend to make. 

Under the FDPCA, you have the right to sue a debt collector who violates your rights. You could receive up to $1,000 in addition to actual damages and attorney fees

The Truth in Lending Act (TILA)

The Truth in Lending Act (TILA) defines what information must be disclosed to consumers who are being offered credit products, including personal credit cards and loans. The law applies to business or commercial credit cards and loans. 

Before TILA, some lenders would engage in deceitful and predatory tactics to lure customers into one-sided agreements. After the Truth in Lending Act was established, lenders were prohibited from making certain changes to the terms and conditions of a credit agreement once executed and from preying on vulnerable populations.

Top 3 tips on what you need to know about FDCPA:

1 – You have the right to full disclosure on your lending agreement

Under the TILA, the lender must disclose your

• Annual percentage rate
• Finance charges, including application fees, late fees, and prepayment penalties
• Amount financed
• Payment schedule
• Total repayment amount over the lifetime of the loan

These details not only have to be presented to the consumer before they sign for the credit but must also plainly appear on billing statements. It does not restrict the amount of interest that can be charged and it does not specify whether credit must be granted. It simply requires lenders to be upfront about how much credit will cost the consumer.

2– You have the right to terminate unfavorable agreements

TILA helps consumers make well-informed decisions and, within limits, terminate unfavorable agreements known as the right to rescission. This gives you a three-day cooling-off period during which you can reconsider your decision and call off the loan without losing money. The right of rescission protects not just borrowers who may simply have changed their minds but also those who were subjected to high-pressure sales tactics by the lender. 

3– It applies to both closed-end and open-end credit

The TILA applies to most kinds of consumer credit, including both closed-end credit and open-end credit. The provisions of the act apply to most types of consumer credit, including closed-end credit, such as car loans and home mortgages, and open-end credit, such as a credit card or home equity line of credit. 

For closed-end consumer loans, Regulation Z prohibits creditors from issuing compensation to loan originators or mortgagees when such compensation is based on any term other than the credit amount. Therefore, creditors cannot base compensation on whether a term or a condition is present, increased, decreased, or eliminated. 

Regulation Z also prohibits loan originators and mortgagees from steering a customer to a certain loan when that loan offers greater compensation to the originator or mortgagee but offers no additional benefit to the customer. 

The Credit Repair Organizations Act (CROA)

If you have bad credit, you may consider using a credit repair service to improve your credit. The truth is, a lot of these companies use dishonest and illegal methods to improve their customers’ credit. The Credit Repair Organization Act (CROA) is a federal law put in place to protect consumers from dishonest credit repair companies. 

The law is intended to make sure that consumers who decide to use credit repair services are aware of their rights and are able to make an informed decision about choosing to pay a credit repair company.

Top 3 tips on what you need to know about CROA:

1 – Credit Repair Companies have Restrictions.

To protect consumers, credit repair organizations cannot legally do the following under the CROA:

• Credit repair companies cannot lie to your creditors about your credit history. They also cannot encourage you to lie to current or future creditors. 
• Credit repair companies are prohibited from altering your identity in an attempt to get a new credit history.
• The company must be completely honest about the services provided to you. They cannot misrepresent what they are providing you.
• You should not be asked to pay for services before they have been provided.
• All credit repair companies have to provide you with a disclosure that details your right to obtain a credit report and dispute inaccurate information yourself.

2– You have the right to a written contract.

Before the credit repair company can perform any services for you, you must be given a contract, you must sign the contract, and the 3-business day cancellation period must expire. The contract should include the following:

• Payment amount required
• A description of the services that will be performed to repair your credit
• An estimate of the time it will take to complete the services (or a date by which the services will be completed)
• A visible statement letting you know you can cancel the contract within 3 business days. You’re allowed to cancel the contract within three days with no cancellation fee.

3– You cannot be pressured to waive your rights

The credit repair organization can’t ask you to sign any kind of form waiving your rights under the CROA. Any waiver you sign is considered void and cannot be enforced by federal or state governments. Organizations that violate the law can be sued for actual damages, punitive damages, and attorney’s fees. 

You can report violations to the Consumer Financial Protection Bureau, your state attorney general, and file suit in your state. You have five years from the date the violation occurred (or the date you learned of the violation) to take action against the organization.

The Fair and Accurate Credit Transactions Act (FACTA)

The Fair and Accurate Credit Transactions Act (FACTA) is a federal law passed in 2003 designed to enhance consumer protections. It is principally known for its provisions against identity theft.

Top 3 tips on what you need to know about FDCPA:

1– You have the right to one free credit report a year

You have the right to one free credit report a year from the credit reporting agencies, and consumers may also purchase, for a reasonable fee, a credit score along with information about how the credit score is calculated. You can access your free credit reports once per year through the website www.annualcreditreport.com.

2– You have provisions against identity theft

The Act also adds provisions designed to prevent and mitigate identity theft, including a section that enables consumers to place fraud alerts in their credit files. It increased the level of oversight that lenders, payment processors, and regulators must provide when proactively searching for suspicious transactions. Similarly, it allowed consumers to register fraud alerts on their own credit cards, in order to alert the authorities when suspected fraud has taken place. 

Unfortunately, identity theft has only increased in prevalence since 2003 because of an increase in e-commerce, social networking, and other online activities. So be vigilant, and set up fraud alerts to reduce your chances of identity theft. 

3– You have the right to “risk-based pricing” notices

FACTA also contained measures designed to bolster consumer protection mechanisms more generally. For instance, it placed new requirements on mortgage lenders to disclose the credit scores and other factors that influenced their decision about whether or not to approve a mortgage request. The Act also requires the provision of “risk-based-pricing” notices and credit scores to consumers in connection with denials or less favorable offers of credit. 

Risk-based mortgage pricing is a practice in which lenders present loan terms and conditions to individual applicants based on the lender’s assessment of the borrower’s level of

The Fair Credit Billing Act (FCBA)

The Fair Credit Billing Act (FCBA) protects consumers from unfair billing practices and gives consumers the right to dispute, in writing, errors on their billing statements. While a billing error is being investigated, the consumer is not required to pay the disputed amount and cannot be penalized for withholding payment for amounts that are in dispute.

The Credit CARD Act

The Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) made significant changes to the law requiring credit card issuers to disclose pricing information for credit products when issuing new credit cards. Other requirements under the Credit CARD Act include:

• Credit card companies must consider a consumer’s ability to repay before issuing a new credit card or raising the credit limit on an existing one
• Give consumers a 45-day advance notice before increasing the interest rate
• Send billing statements 21 days before the due date
• Disclose the cost of making minimum payments and the time it will take to pay off the balance with minimum only payment
• Only charge an over-the-limit fee when the cardholder has opted-in to having over-the-limit transactions processes
• Not offer tangible incentives, like t-shirts or gifts, in exchange for college students who sign up for a credit card