1. Debt and Credit Laws for Your Protection
A good credit history is essential for each individual who has a potential need to take out a loan.
The credit worthiness of an individual reflects on all his financial dealings and, in reality,
impacts a person's entire life. If your credit score isn't especially admirable, then you may be
denied loans or advances when you have a need. Alternatively, you might be able to secure a
loan with a low credit score, but it will be at a higher rate of interest than those prevalent in the
market. Your credit score is taken quite seriously by lenders, debtors, various financial
institutions, and even employers.
Fair Debt Collection Practices Act
This act forms a portion of the "Consumer Credit Protection Act." In essence the law
emphasizes the need for a just and rational ethical approach in protecting the rights of the
consumer. It forbids debt collectors from using pressure tactics, misleading actions, and
discriminatory powers to harass consumers for the rounding up of their debts.
Debt collectors cannot contact a borrower, for example, simply to determine their
whereabouts. Neither are they permitted to contact debtors before 8:00 a.m. or after 9:00 p.m.
local time. They cannot coerce, use pressure tactics, or intimidate with legal action. In practice,
though, the Act excludes banks, department stores, and grocery stores that have their own
debt collection services.
Fair Credit Reporting Act
This Act provides for confidentiality, discretion, and validation of facts in creating an individual's
credit reports. It seeks to control the distribution, collection, and utilization of "consumer credit
information."
Once customers receive their credit reports, they can also validate them and pursue
modifications as needed to the report since the credit bureaus are required to maintain up-to-
date information about them. Some organizations, such as government agencies, insurance
companies, and banks may also receive these confidential reports about you.