Consumer Handbook to Credit Protection Laws (Part 3)
Credit DictionaryAccounts Receivable: credit extended by any person or company to another (normally unsecured) with ..... ...... that you find must be investigated by the credit bureau with the creditor who supplied the data. The bureau will remove from your credit file any errors the creditor admits are there. If you disagree with the findings, you can file a short statement in your record giving your side of the story. Future reports to creditors must include this statement or a summary of it.
Old Information. Sometimes credit information is too old to give a good picture of your financial reputation. There is a limit on how long certain kinds of information may be kept in your file:
-- Bankruptcies must be taken off your credit history after 10 years.
-- Suits and judgments, tax liens, arrest records, and most other kinds of unfavorable information must be dropped after 7 years.
Your credit record may not be given to anyone who does not have a legitimate business need for it. Stores to which you are applying for credit or prospective employers may examine your record; curious neighbors may not.
Billing Mistakes. In the next chapter, you will find the steps to take if there's an error on your bill. By following these steps, you can protect your credit rating.
Wipe Out DebtIn 1938 a federal law was passed known as the Wage Earner Plan. It is administered by the same branch of our courts that ..... Other Aspects Of Using Credit
The best way to keep up your credit standing is to repay all debts on time. But there may be complications. To protect your credit rating, you should learn how to correct mistakes and misunderstandings that can tangle up your credit accounts.
When there's a snag, first try to deal directly with the creditor. The credit laws can help you settle your complaints without a hassle.
What Laws Apply?
FAIR CREDIT BILLING ACT sets up procedures requiring creditors to promptly correct billing mistakes; allowing you to withhold payments on defective goods; and requiring creditors to promptly credit your payments.
Complaining About CreditComplaining to Federal Enforcement Agencies: First try to solve your problem directly with a creditor. Only if ..... IN LENDING gives you three days to change your mind about certain credit transactions that use your home as collateral; it also limits your risk on lost or stolen credit cards.
Billing Errors
Month after month John Jones was billed for a lawn mower he never ordered and never got. Finally, he tore up his bill and mailed back the pieces--just to try to explain things to a person instead of a computer.
There's a more effective, easier way to straighten out these errors. The Fair Credit Billing Act requires creditors to correct errors promptly and without damage to your credit rating.
A Case of Error. The law defines a billing error as any charge:
-- for something you didn't buy or for a purchase made by someone not authorized to use your account;
-- that is not properly identified on your bill or is for an amount different from the actual purchase price or was entered on a date different from the purchase date; or
-- for something that you did not accept on delivery or that was not delivered according to agreement.
Billing errors also include:
-- errors in arithmetic;
-- failure to show a payment or other credit to your account;
-- failure to mail the bill to your current address, if you told the creditor about an address change at least 20 days before the end of the billing period; or
-- a questionable item, or an item for which you need more information.
In Case of Error: If you think your bill is wrong, or want more information about it, follow these steps:
1. Notify the creditor in writing within 60 days after the first bill was mailed that showed the error. Be sure to write to the address the creditor lists for billing inquiries and to tell the creditor:
-- your name and account number;
-- that you believe the bill contains an error and why you believe it is wrong; and
-- the date and suspected amount of the error or the item you want explained.
2. Pay all parts of the bill that are not in dispute. But, while waiting for an answer, you do not have to pay the amount in question (the "disputed amount") or any minimum payments or finance charges that apply to it.
The creditor must acknowledge your letter within 30 days, unless the problem can be resolved within that time. Within two billing periods--but in no case longer than 90 days--either your account must be corrected or you must be told why the creditor believes the bill is correct.
If the creditor made a mistake, you do not pay any finance charges on the disputed amount. Your account must be corrected, and you must be sent an explanation of any amount you still owe.
If no error is found, the creditor must send you an explanation of the reasons for that finding and promptly send a statement of what you owe, which may include any finance charges that have accumulated and any minimum payments you missed while you were questioning the bill. You then have the time usually given on your type of account to pay any balance, but not less that 10 days.
3. If you still are not satisfied, you should notify the creditor in writing within the time allowed to pay your bill.
Maintaining Your Credit Rating. A creditor may not threaten your credit rating while you're resolving a billing dispute.
Once you have written about a possible error, a creditor must not give out information to other creditors or credit bureaus that would hurt your credit reputation. And, until your complaint is answered, the creditor also may not take any action to collect the disputed amount.
After the creditor has explained the bill, if you do not pay in the time allowed, you may be reported as delinquent on the amount in dispute and the creditor may take action to collect. Even so, you can still disagree in writing. Then the creditor must report that you have challenged your bill and give you the name and address of each person who has received information about your account. When the matter is settled, the creditor must report the outcome to each person who has received information. Remember that you may also place your own side of the story in your credit record.
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