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5 Credit Laws Consumers Should Know

Knowing your credit rights is important because it helps you manage your credit issues and take control of it. There are several laws e.g. the Fair Credit Reporting Act and the Truth in Lending Act that affect your credit life. Many of the credit laws that came into effect during the 1970s have been around since then, and these regulations give you some serious credit muscle. Having knowledge about the basic laws of the Credit system will go a long way in ensuring that your finances/ credit reports are managed properly and accurately by the different institutions.


From a legal perspective, all consumers should be aware of these 5 Credit Rights:

  • The right to know what information is stored in your credit file

  • The right to a quick and accurate credit report

  • The right to have only verified debts reported by third-party collection agencies

  • The right to know the cost of your credit

  • The right to equitable access to credit

If you have a hard time dealing with errors on your credit report or are constantly being harassed by creditors, there are plenty of credit laws that can help/protect you. Some of them include:

1. The Fair Credit Billing Act


This Bill ensures that you are protected from late or unsent Bills. For instance, If your bill never arrives by mail or email as scheduled, it is important to follow up with the card issuer within 60 days of the date it was sent. This will protect you from future interest charges resulting from the error.

If the goods or merchandise that you ordered were never delivered as promised, you have a right to dispute the charge. This means that if you discover that the goods were delivered late or different than what was promised, you can contact the card issuer and argue the issue.The merchant will either give you an explanation or return your bill. You do not have to pay the disputed amount, but you will have to pay the rest of the bill.

2. The Truth in Lending Act


This law protects you against inaccurate/ unfair credit billing and credit card practices. It gives you the right to follow up an inaccurate billing by sending a letter to the address t provided by the billing company. It also gives you a right to make sure that the letter has a record of being received. In the case of credit card theft make sure to notify the card issuer immediately after your card is compromised. Under this Act, you can report an error within 60 days of receiving the notification of use by a party that is not you.

3. The Fair Debt Collection Practices Act


If you believe that you owe the bill, but you can still make payment arrangements before it shows up on your credit report, then the Act isn’t applicable to you.


The Fair Debt Collection practices Act only applies, if the collector refuses to stop working on the bill after you dispute it, then you have a right to ask them to verify the account. This can be done by sending a certified letter to the agency.


Regardless of how you handled the situation, there are plenty of laws that can help you get through the panic of getting a collection notice. One of the many laws you can use is the Fair Debt Collection Practices Act.

4. The Fair & Accurate Credit Transactions Act


The FACTA (Fair & Accurate Credit Transactions Act), allows you to get a free annual credit report from all three major agencies once a year. This is a great way to get started tracking your credit reports, as it saves you time and money. Just order one from whichever agency you want.

5. The Electronic Funds Transfer Act


If you suspect that a fraudulent transaction has hit your financial institution, it should be notified within 60 days after the statement was sent. Reporting the incident protects you from being locked out your entire account.

If a thief used your debit card, you should immediately report the incident. This helps you avoid getting charged for the first $50 damages.

State Statutes of Limitations


If the bill is too old to be considered past due, send a certified letter to the collector explaining it. This can be used to ask the agency to leave you alone.

Each state has its statute of limitations. For instance, if a debt is more than two years old, you should ask for verification before trying to sue.

We can help you get started on your credit awareness/ protection journey. Feel Free to visit our website https://www.thesdavislawgroup.com/ to book a consultation session with us.


©2022 by The S. Davis Law Group

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