“The Equal Credit Opportunity Act [ECOA], 15 U.S.C. 1691 et seq. prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection Act.” ("Equal Credit Opportunity Act | CRT | Department of Justice," n.d.). Any candidate who applies for a line of credit, must be notified within 30 days if their credit was to be denied, it is always best to send the notice in writing, rather than telling the consumer, because there is not any documentation that can back up the words someone said. If a credit account were to close, make changes to one’s credit limit, or anything of that matter, the same terms will apply no matter what. …show more content…
Consumer Rights & Reporting Regulations," n.d.). Anytime an individual applies for a line of credit, it is important to review the consumer’s credit history, to see the accounts they have had in the past, and also the accounts they still have, how they made their payments, whether they’re on time or if any were late. Using this information will allow the creditor to give the consumer the right type of
It is important to take a look at every statement that you get in the mail because if you have made late payments, or even if your payments arrived late at your creditors office, then your interest rate will increase and they do not have to legally notify you of this because of their cardholders agreement that you signed when you took out a line of credit.
When individuals borrow money or incur debt to purchase items that will be used immediately, this is called consumer credit (Einstein, 2013). Referring to purchases that are consumable such as a meal, an automobile, or other personal needs, consumer credit differs from a home mortgage or business investment (Einstein, 2013). In society today, many people live from paycheck to paycheck and often rely on credit to get them through times requiring additional funds such as Christmas, birthdays, weddings, and other events. Although this practice can be costly and create further financial problems, consumers use credit to obtain necessities, as well as items that they simply desire to purchase.
This is known as a hard inquiry, and it usually knocks a few points from the credit score.
Meanwhile if a business decides to use any of the information obtained from the credit report to make a decision to deny the applicant for employment there are some rules they must follow. They are required to provide the applicant a “pre-adverse action disclosure notice” and a copy of “A Summary of Your Rights under the Fair Credit Reporting Act” a paper furnished by the “Federal Trade Commission” (FTC). (FTC Facts for Business, 1999). Next the applicant must also have a chance to review the report before the employer can deny the applicant. (Rosen,
The Consumer Financial Protection Bureau, or CFPB, was created as a tool of financial reform in the legislative package that was authorized by the Dodd-Frank Act, but the law specifically includes terms that prohibit setting interest rate limits, which is contrary to the 36-percent limit that the CFPB is currently trying to mandate as a universal limit on short-term rates. The specifics of the Dodd-Frank Act, according to the www.dodd-frank-act.us, state that the legislation grants, "NO AUTHORITY TO IMPOSE USURY LIMIT" unless such a limit is first passed through due legal processes.
This information helps determine if the tenant is likely to pay their bills on time. Finding a job is an advantage to having a good credit record. Employers have the option to look at an applicant’s credit history to decide whether or not that person is reliable. If an employment agency is checking a credit report they usually check it for fraudulent activity. Other company’s check for derogatory information. If those types of things are found then the applicant may have some explaining to do. Not every job looks at credit history. However, some jobs do such as, accounting, finance, or a high ranking position in a company. A person with good credit history shows if this person is responsible and if that person is able to be trusted with their finances. On the other hand, there are certain drawbacks of having a credit record on file. Some offenses to a credit record are minor and others are major. Bankruptcy is a case where a consumer is unable to pay outstanding debts. According to Investopedia (2001), “Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy” (2001). After the proceedings the individual is given another chance to pay off the debt. Bankruptcy is on file for ten years. During this time, the person or business responsible may struggle with the loss of property. Moreover, other losses may persist that include, loss of income, poor credit score,
The Federal Fair Credit Reporting Act (“FCRA”) provides borrowers with consumer rights and protections including the right to dispute inaccurate or incomplete information with the consumer-reporting agency or with the furnisher (Residential Credit Solutions, Inc.) directly. This law requires RCS to review the dispute including supporting evidence provided with the dispute. The furnisher must investigate the disputed information and provide its findings to the consumer-reporting agency or to the borrower.
The U.S. Federal government passed the Fair Credit Report Act in the 1970s to protect and ensure transparency and privacy between all U.S. Citizens in the systems of consumer reporting agencies. In other words, no one could just put information on us in these databases that are misleading or false and therefore, are obligated by law to change it when falsehood is discovered.
I learned from our interview that there are three credit rating agencies, Experian, Equifax, and TransUnion. These agencies use a wide variety of information about every person to determine his or her “creditworthiness” from the perspective of banks and just about any other entity that might ever consider extending financial credit to a person. Generally, a good credit score means that lenders will be willing to let you open new accounts, borrow money, and give you the lowest interest rates on any loans. Conversely, a bad credit score means the exact opposite. I learned that every late payment of any kind is a negative mark on my credit score and that makes the credit card’s policy on late payments very important. I learned that the APR is the financing charge calculated as an average percentage of interest on any amount
(Fair Credit Reporting Act, page 2). In the Fair Credit Reporting Act, it stipulates the responsibility and obligation of credit agency and consumers. First, it clearly defined how to collect consumers’ information legally: “The term "consumer report" means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living” (Fair Credit Reporting Act, page 4). Also, collect all the information is very important, no matter the information is positive or negative. After collecting the information, then is how to use the information. In the Fair Credit Reporting Act, it explains how to use the information. These information can only be used to determine if consumers are eligible for loans, insurance or get a job. If a third party need to use consumers’ information, Fair Credit Reporting Act stipulates that “These procedures shall require that prospective users of the
We collect, hold, use and disclose personal information about you (including information required to comply with Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), the National Consumer Credit Protection Act 2009 (Cth) and the Personal Property Securities Act 2009 (Cth)) to: assess and process your application; provide you with, manage, audit, evaluate, improve and develop product or services; notify a credit reporting body or other credit providers of your payment history or any default by you; conduct credit scoring; model and test data; communicate with
Each credit bureau uses different methods to do this (which is why you will have
Credit scores affect every major decision an individual will make in their lifetime. A credit score does not care if you’re a nice person, have an impressive job, or if you make everyone at work laugh, they only care if you pay your bills on time, have several different accounts open, and how much debt you owe. These factors represent every person in America and decides their fate as to whether or not they’ll be able to buy a car, a house, or have a successful
Instead, wait to get the letter in the mail that tells you the specific reasons why you were denied, being turned down may have nothing to do with your credit score, but could be related to another factor, like your income.
Knowing what other outlying debts customers have could be helpful in determining high-risk customers. Along with past credit history this could be helpful in determining customers to reject.