Your Credit Rights
How the Law Protects You
Fair Credit Reporting Act
The Fair Credit Reporting Act promotes the accuracy and privacy of
information in consumer credit reports. It also controls the use of credit
reports and requires consumer reporting agencies to maintain correct and
According to this act, you have a right to review your credit report
and to have incorrect information corrected.
Issuing Credit Reports
Credit bureaus, the most common type of consumer reporting agency (CRA)
that compiles and issues credit reports, are required to help you understand
your report. Reports can be issued only to those with a legitimate business
reason. These include creditors, employers, insurers, and government agencies
reviewing your status for licensing or benefit purposes, or any third
party for whom you request a report.
Credit Report Errors
If you find an error on your report, you should notify the credit bureau
in writing immediately. The bureau is responsible for investigating and
for changing or removing any incorrect data. The source of the error must
then notify all consumer reporting agencies where they sent information.
If you are not satisfied with the correction, you have the right to add
a brief statement (100 words or less) about the issue to your credit report.
The statement should be a clarification, not an explanation, of credit
If your credit application is turned down because of an error on your
report, the lender is required to provide you with the name and address
of the credit bureau that issued the report. Then, you have 30 days to
request a free copy from the bureau. The bureaus must disclose to you
all information in the report, its source, and who has recently received
You have the right to have the credit bureau re-issue corrected reports
to lenders who received reports within the last six months, or to employers
who received one in the past two years.
Consumer reporting agencies must provide you access to the information
in your credit report, as well as identify those who have requested the
information recently. There is usually a charge for each report, unless
you have been denied credit recently.
You are entitled to one free report a year if you certify in writing
that: (1) you are unemployed and plan to look for a job within 60 days,
(2) you are on welfare, or (3) your report is inaccurate due to fraud.
You may request that consumer reporting agencies do not distribute your
name on lists used by creditors and insurers to make unsolicited offers
of credit and insurance. Requests can be made by telephone or in writing
by filling out a form available from each credit reporting agency. For
telephone requests, call (888) 5 OPT OUT to be excluded from Experian,
Equifax, and Trans Union. Telephone requests last for two years; written
requests are permanent.
Consumers have the right to sue consumer reporting agencies, users, and
providers in state and federal court for violations of the Fair Credit
Equal Credit Opportunity Act
The Equal Credit Opportunity Act requires that individual creditors
apply credit standards in a fair manner, so that all consumers are given
an equal chance to obtain credit. It does not require all creditors to
have the same standards, nor does it guarantee approval of loan applications.
In reviewing your credit application, lenders cannot discriminate on
the basis of sex, marital status, race, religion, national origin, age,
income from assistance programs, or if you exercise your rights under
the Consumer Protection Act. The only acceptable criteria are your ability
and intent to repay funds borrowed.
Credit applications cannot ask you about your sex, race, color, religious
affiliation, or national origin unless you are applying for residential
real estate. Even then, you are not required to answer. The information
is used only to enforce fair housing laws, not for evaluation purposes.
You cannot be asked your marital status, unless your spouse will help
secure, use, or be legally responsible for the loan. Creditors are also
prohibited from asking about your plans to have children.
Credit for Couples
Spouses have the right to have their credit histories listed separately,
including the accounts they use jointly. Married women have the option
of using their birth name or married name. In the case of couples who
jointly established credit, but whose credit appears in the name of only
one spouse, the other partner has the right to rely on that credit history
If you pay or receive alimony, child support, or maintenance, you can
be asked how these items affect your income. However, if you do not plan
to use this income to repay the loan for which you are applying, you do
not have to list it on your application.
Creditors can ask how old you are in order to be certain you have reached
legal age to enter into contracts. They can also consider your age to
estimate how long you will continue to work. However, age cannot be used
to deny credit to those 62 or older (in the case of credit-scoring systems)
or to those applicants whose age exceeds that required for credit insurance.
The terms of your credit cannot be changed simply because your life circumstances
do. For example, the length, interest, or other features of loans cannot
be changed; you cannot be forced to reapply for a loan; and you cannot
be terminated because you change your name or marital status, reach a
certain age, or retire.
Lenders must notify credit applicants of their decision within 30 days
after the application is completed. If credit is denied, the creditor
must provide a written statement that includes the action taken, reason
for denial (or how to request it), the applicant's rights, and the name
and address of the enforcing federal agency. If you believe that discrimination
has taken place, you have the right to file suit. If creditors are found
to have discriminated unfairly, they can be held liable for actual damages
and punitive damages up to $10,000.
Fair Credit Billing Act
The Fair Credit Billing Act provides for the prompt correction of
errors on open-end credit accounts (department store credit accounts,
for example) and protects consumers' credit ratings while they are settling
Under this law, if a consumer is disputing a charge, creditors cannot
report the consumer's account as delinquent. This applies to open-end
credit instruments, such as credit cards, revolving charge accounts, and
overdraft checking. Consumers who question an item are responsible for
notifying the creditor in writing within 60 days of receiving the bill.
The creditor must acknowledge the notice within 30 days and may not do
anything to damage the consumer's credit rating while the item is in dispute.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act promotes the fair treatment
of consumers by prohibiting debt collectors from using unfair, deceptive,
or abusive practices.
This act applies to professional debt collectors who collect on loans
they did not originate. Though it technically does not apply to banks,
department stores, and other lenders who collect their own debts, no reputable
lender is permitted to use such practices.
- Debt collectors are permitted to contact people other than the debtor
only to locate the debtor or make a reasonable effort to communicate
with the debtor about the debt.
- After making contact, debt collectors are required to send written
notice informing the debtor of the amount of the debt, the name of the
creditor, and the fact that the debt will be considered valid unless
disputed within 30 days.
- Debt collectors are prohibited from harassing, oppressing, or being
abusive in collecting a debt. This includes using threats or obscene
language, publicizing the debt, making annoying or anonymous telephone
calls, and misrepresenting the identity of the collector, the status
of the debt, and the consequences if it is not paid.
If debt collectors violate the Fair Debt Collection Practices Act, consumers
can sue for actual and punitive damages.
For More Information
The Federal Reserve Bank of San Francisco has several other consumer
brochures. These brochures are posted on our web site at: http://www.frbsf.org/publications/consumer.
Learn about . . .
Questions and concerns about credit bureaus and credit practices
can be directed to:
Federal Trade Commission
Consumer Response Center - FCRA
600 Pennsylvania Avenue, NW
Washington, D.C. 20580
Other resources for credit-related problems include:
- Attorney General's Office - State
- Consumer Affairs Offices - State/Local
- Financial Regulating Bodies
||For Federal Credit Unions:
National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314
For Federal Reserve Member Banks:
Federal Reserve Consumer Help
Federal Reserve Consumer Help
The Federal Reserve's new centralized consumer intake function has been designed to provide national support and
resources to consumers with inquiries or complaints about a bank or other financial institution.
P.O. Box 1200
Minneapolis, MN 55480
Or call toll-free: 888-851-1920
For Federally Insured Banks (non-Fed members):
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
(800) 934-3342 or (202) 942-3100
For Federally Insured Savings and Loans and Federally Chartered
Office of Thrift Supervision
1700 G Street, NW
Washington, DC 20552
(800) 842-6929 or (202) 906-6237
For National Banks:
Office of the Comptroller of the Currency
1301 McKinney Street, Suite 3710
Houston, TX 77010
This overview was based on materials originally
created by the Federal Reserve Bank of Philadelphia.