Credit Protection Laws You Need To Know

The recovering economy made it easy for many credit repair companies to make money, turning the industry into a billion dollar business with millions of people paying good money to repair their damaged credit. The good news is, certain laws are in place to provide protection against transactions with corporate interests.

From abusive debt collectors to false credit reporting, we will take a look at some of the most important credit reporting laws you need to know about:

FCRA or The Fair Credit Reporting Act

FCRA was passed to protect consumer and credit information. This law outlines how consumer info and credit should be collected, distributed and used by collection companies. The FCRA also provide specific responsibilities of creditors and consumer reporting agencies as well as a set time frame for which credit reporting agencies can maintain consumer information.

FACTA or Fair And Accurate Credit Transactions Act

Passed in 2003, the Fair and Accurate Credit Transaction or FACTA entitles all credit consumers to one free annual credit report. FACTA also requires all merchant to shorten all social security numbers, credit card numbers and debit card numbers to only the last five digits on the receipts so they will not be stolen by fraudulent persons or agencies.

FDCPA or Fair Debt Collection Practices Act

This law protects consumer rights against abusive, illegal and unsavory debt collection practices. Aimed towards debt collection companies, debt collectors and creditors who overstep their bounds to collect information from debtors, the FDCPA also protects credit consumers from deceptive, false collection tactics and misrepresentation made by debt collection companies. FDCPA has outlined 17 false or misleading collection strategies popularly applied by abusive debt collection companies.

The Credit Card Act

By far, one of the newest and most extensive credit protection laws enacted, the Credit Card Act help give consumer more options in terms of dealing with banks and credit card companies. Unfortunately, the Credit Card Act makes it much harder for low income individuals with bad credit to get credit because it limits the issuance of interest rate hikes for lenders.  The Credit Card Act also gives consumers the right to opt out and limit applying the universal default (the practice of asking for higher interest rates for consumer based on other unrelated credit issuers).

By keeping the above information in mind, you will determine what steps you need to take in order to protect yourself from questionable practices applied by collection agencies, debt collectors and even original creditors.

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