Know Your Rights For Debt Relief According To FCRA

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If you are knowledgeable about your financial position you will be better off when you want to consolidate your debts for effective and successful personal finance management. It is for this reason you should follow and know your rights according to The Fair Credit Reporting Act.

To start with, you must know first about your loan eligibility. For this you will need to pull out and analyze your credit report from time to time.

The law allows you to ask the credit reporting companies and other entities to provide information regarding your credit.

You are also allowed to ask them to correct any errors on your report through a dispute letter. You can visit the FTC website to know the ways in which you can settle disputes.

Apart from that, according to The Fair Credit Reporting Act, FCRA you can pull your report from Equifax, Experian and TransUnion one every year from each to look for the following:

  • All items should involve your debts only
  • Any incomplete or inaccurate information
  • Addresses of places you never lived
  • Names of employers you have never worked for
  • Any negative info that should no longer be on the credit report especially dating more than seven years back and any
  • Items in particular that you know the lenders will be typically interested in.

At this point you must know that your credit score will not be included in your credit report. This is due to the fact that you credit report is prepared annually but your credit score may change monthly or as and when any positive or negative events are reported to the bureaus by your creditors.

Understanding the terms

Nowadays, different credit card companies offer free credit checks to their customers as well in order to retain them. Apart from that, you will also get different personal finance and mobile banking apps that will also help you to know your credit score for free. However, you must keep in mind that different lenders use different forms of your credit score for different types of credit inquiries.

Apart from that you must also know that while you care checking your credit report for free you may also be asked whether or not you will also want to see the credit score. It is wise that you understand the terms before you agree to such offer.

Know the consequences

You must also know about the consequences of not paying on time which does not only start and end with paying simple late charges. There are other serious effects and long-term problems of paying late or not paying back. Some of these effects are:

  • Potential damage to your credit history
  • Making your future borrowing capacity weaker
  • Risk of credit being denied
  • Get loans that are much more expensive
  • Your account sent to collections that will make your life hell
  • Run into the risk of having your wages garnished for recovery of dues
  • You may even lose the items given as collateral if you take out a secured debt consolidation loan and
  • Have to deal with the added stress that will decline your overall well-being.

Therefore, if you are unsure about your financial ability and do not want to fall into such stressful condition, visit any bank or for a debt consolidation loan as that will make the situation even worse.

Authorized and joint account holder

Accounts can be either authorized or joint and depending on the type, the consequences will also vary accordingly.

  • When you allow a person to use your credit as an authorized user then all legal accountability is on you. This means that, if the account goes to default then the authorized person will not be legally responsible to pay the loan and the creditors will not pursue for any payment from anyone other than you.
  • On the other hand, if you make someone else asa joint account holder then the responsibility to repay the loan falls on both and both will be held equally responsible for paying the debt back, especially when the account goes into default.

Therefore, know your borrowing capacity as well as the borrowing terms well before you take out a loan.

  • Know about the additional charges and fees that you will need to pay for the loan you wish to take out from a bank, a non-ban, a line of credit or for any specific transactions such as balance transfers, cash advances, and penalties for late payments or prepayments and also for making any foreign transactions.
  • Know the total amount you pay in the end when you borrow apart from the amount borrowed as that will include the interest plus the fees for arranging such credit which is expressed as the Annual Percentage Rate, APR.

Most importantly, you must know your consumer rights and responsibilitiesas a borrower. This is a broad subject but such knowledge will help you to deal with your lenders when you wish to get rid of your debts with a debt consolidation loan much easily.

Your rights as a borrower remains the same even if you seek for debt relief, handle disputes, or file for bankruptcy.

According to the Fair Credit Reporting Act, your rights include:

  • The right to know the contents of your file
  • The right to ask for your credit report
  • The right to dispute any inaccurate and incomplete information
  • The right to have the erroneous information removed or corrected
  • The right to have negative info and reports that are older than seven years excluded from the credit report and
  • The right to limit access to your credit report with your consent only.

However, the rights may vary a little if you are a military personal or have been a victim of fraud. You can access the official website of the Federal Trade Commission to know more of these additional rights.

As for your responsibilitiesit includes understanding the terms of the loan agreement, checking your statements, paying back on time, updating your contact information and repaying the loan amount in full including its fees.

Featured image: Unsplash

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Know Your Rights For Debt…

by Sujain Thomas time to read: 4 min