The Place to Find Informative Articles On Personal Credit
Your Credit Rights… The Fair Debt Collection Practices Act
Many consumers have their legal rights violated by collectors without even knowing it. The Fair Debt Collection Practices Act is designed to stop harassing, unfair, and abusive debt collection practices.
Knowing the important details of this act will help you stand up against abusive collection practices and stop collection companies from violating your rights.
There are many requirements debt collectors must abide by per the FDCPA. Debt collectors are not allowed to tell others details about the consumer including that they owe a debt, they cannot communicate with anyone other than the consumer more than once,
not communicate through post card or have ANY markings on the outside of their envelope indicating they might be a debt collector.
Basically, collection companies cannot use the fact that they are a debt collector to bully you into paying.
They cannot identify themselves as a debt collector to your employer, and they cannot send things in the mail to identity they are a debt collector with the intent of embarrassing or causing other hardship to you.
Debt collectors are also not allowed to call a consumer at an unusual time or place. This includes before 8 a.m. and after 9 p.m. A debt collector cannot contact a consumer at their place of
employment if they have reason to believe this is prohibited by the employer.
They are also required to immediately cease and desist contact with you if you are represented by and attorney, or if you notify them to do so in writing or notify them that you refuse to pay the debt.
There are many restrictions of abusive and harassing practices in the FDCPA also. Debt collectors are prohibited from using the threat of violence or other criminal means to cause harm to the consumer.
The use of obscene language is prohibited along with the publication of information that the consumer allegedly owes the debt.
Debt collectors cannot cause a consumer’s phone to ring repetitively with the intent to annoy or harass any person. And they have to clearly identify themselves on every phone call.
False and misleading representations are also prohibited per the FDCPA. These include the debt collector identifying themselves as an affiliate of the United States government, missrepresenting
the legal status of a debt, or that they are an attorney if they are not.
Your debt collectors cannot falsely represent that the nonpayment could result in the arrest or imprisonment of the consumer or the seizure of their property or garnishment of their wages unless such action is lawful and the debt collector intends on taking that action.
Debt collectors are not allowed to communicate to any person credit information which is known to be untrue or in dispute. They also cannot falsely issue you documentation representing itself as coming from the courts.
They also are prohibited from using any false representation or deceptive means to collect a debt. They must identify themselves to the consumer as a debt collector and that the nature of the call is for that purpose.
Debt collectors are NOT directly affiliated with the credit reporting agencies, and they cannot claim that they are per the FDCPA.
They cannot accept post-dated checks of more than 5 days, or attempt to collect more than what is owed due to the original contract.
They must also send a statement to each consumer within 5 days of contacting the consumer. This letter must contain many things including the amount of the debt, creditor’s name, and many disclosures specific to FTC language.
Any violations within this act can be costly to the debt collector, especially in the civil and class action aspects.
Knowing When Its Time To Get Credit Help
- You are only able to make minimum payments on your credit card debt and other revolving accounts.
- You have recently been denied credit. If a creditor declines you, it means that they feel that your finances are either stretched to the limit or beyond.
- You can’t afford to save or are exhausting your savings to support your lifestyle. If you are not able to set aside savings on a consistent basis, there is cause for concern. If you are exhausting savings to keep up with your lifestyle, it’s a signal that you are living beyond your means.
- Cards are near or over your credit limit. Your creditors set your credit limit based on your credit history, income and outstanding debt. If you are at or near this limit it is a good sign that trouble awaits you if some hard financial decisions are not made. Make it a goal to keep your revolving balances below 50% of your available credit limits.
- Your credit card balances are increasing.
- You rely on cash advances from the cards to pay your other bills. This is referred to as “Robbing Peter to pay Paul”.
- You live pay check to pay check. Do you struggle to have any extra funds left over? Does all of your paycheck go toward groceries, bills and your credit card payments.
- Collectors are calling you. Receiving calls from creditors is a sure sign of trouble.
5 Benefits of a Good Credit Score
By now, you probably know that a high credit score is better than a low one, but do you know all the reasons that’s true? A good credit score and solid credit history can have a positive impact on many facets of your life. If you’re not there yet, don’t worry! You can improve your score over time. For reference, a “good” credit score is generally considered to range from the mid-600s to mid-700s. Here are several benefits of having a good credit score.
Easier to Get a Loan — Maintaining a good credit score shows that you use credit responsibly. When banks or other lenders see this, it lets them know that you are a good credit risk and more likely to pay back the money you’re asking them to loan to you.
Lower Interest Rates on Loans — You know when you see those commercials offering 0% or extremely low financing? Those impressive rates are reserved for customers with equally impressive credit. If you want to keep your interest rates low, keep your credit score high.
Easier to Rent an Apartment — Apartments routinely check credit scores for the same reason lenders do. They want to make sure that if they allow you to live there, you’re going to pay the rent in full, on time, every month. A good credit score offers them peace of mind that you are more likely to do that.
Improved Chance of Getting a Job — Though certainly not the only criteria employers consider, a good credit score gives you a better chance of scoring a good job. Employers look at it from a responsibility standpoint. They think if you use credit responsibly, you are more likely to be a responsible employee, too.
No (or low) Security Deposits — You probably love your cell phone and enjoy electricity and running water, right? A good credit score means you will be able to get all those things (and more) without having to put down a big chunk of money up-front as a security deposit. Utility companies and other service providers are happy to offer their services to customers who have a history of paying bills on time.
If you’re not sure of your current credit score or would like tips on how to improve your credit score, try Credit Look. It’s a fast, free service that gives you your credit score and a whole lot more.
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Do You Need to Know Your Credit Score?
Knowing your credit score is just one part of being an informed consumer. But even if you know that magical three-digit number, do you know what it actually means? Here’s a quick overview.
A credit score is a three-digit number that reflects the information in your credit report. Most folks are familiar with the FICO model that generates a score from 300 to 850. A 300 is a very low credit score, while an 850 means lenders will be extremely eager to lend you money. A score of 720 or above is generally considered ‘good’.
Scores were developed so that loan officers wouldn’t have to actually read and understand credit reports. They are widely used and apparently the scores really do indicate the likelihood that a consumer will repay a debt. That means the lenders can trust someone with an 810 and charge extra interest for someone with a 610.
Of course the lenders get to decide what they think is a good score or a cut off score or a subprime score. And here’s something you probably didn’t know: the score you buy before you visit you visit a car dealer is not the same score the dealer will see. They get a special score based on auto deals. And if you looked at your score from all three major reporting agencies, you would see three different scores. Plus, scores can fluctuate up or down in a little as a few days.
Want to know about your credit? You’ll be better off reviewing your complete credit report, rather than just paying to receive your FICO score. You can get a free copy of your full credit report at annualcreditreport.com. It will tell you every issue you have and you can begin to work on fixing any problems you see. You can’t do that with your just your credit score alone.
Reprint from TakeChargeAmerica.org