Credit Laws

The federal government has enacted four major federal credit laws that are designed to safeguard your rights. Each one works in a different way to protect some aspect of your privacy. In fact, the intent of these mandates is clearly to provide a significant amount of coverage in areas in which consumers might not fully understand the possible consequences that could occur should they not be in place.

HIPAA

The Health Insurance Portability and Accountability Act is also known as HIPAA. This law protects your privacy by prohibiting doctors, hospitals and other medical personnel from sharing personal information about you with third parties during the process of reporting or collecting a debt. It helps to protect you from harassment. The privacy practices of each provider are required to be presented to each individual in written form. Consent must be obtained by the medical practice in which their patients acknowledge that they have received such documentation.

FCRA

The Fair Credit Reporting Act (FCRA) provides guidelines that must be followed by credit bureaus when consumers contact them about information that is believed to be in error. A reasonable time is established during which the credit agency must respond to the consumer or else the information in question is to be removed. This time frame is typically about 30 days.

FDCPA

With the Fair Debt Collection Practices Act (FDCPA), those companies or agencies that are attempting to collect a debt are required to provide certain types of information to the consumer beforehand. In order to prove that an individual is responsible for a particular debt, a signed contract as well as an extensive billing history must be provided. This information must also be part of the documentation submitted when reporting a debt.

FACTA

The Fair and Accurate Credit Transaction Act (FACTA) was designed to be an addition to the Fair Credit Reporting Act (FCRA). It specifically addresses issues associated with identity theft and outlines ways that consumers can protect themselves. One key element of this law is the ability of all consumers to obtain a free credit report at least once each year so they can be alerted to any unexpected changes. This act also gives you the ability to add a fraud alert to your credit report. This mandates that a business must contact you if it is approached to extend credit in your name.

By knowing their rights, consumers can better protect both their privacy and their credit rating from predatory practices. Use the above information to be a better informed consumer and protect what is rightly yours. Contact Build My Scores for more information.