Consumer Rights, Consumer Reports

There are scores of consolidation companies targeting the hundreds of thousands of people that can't seem to keep the reins in on their credit card spending. Do you feel like your credit is spiraling out of control? There's no need to. There are plenty of programs to help get you back on track; in fact, there are 1,100,000 according to Google™. But which of these programs is best for you? How do you know you're not being scammed or suckered?

The Federal Trade Commission says to take caution when reading phrases like, "Consolidate your bills into one monthly payment without borrowing," "STOP credit harassment, foreclosures, repossessions, tax levies and garnishments," "Keep your property!" "Wipe out your debts! Consolidate your bills! How? By using the protection and assistance provided by federal law. For once, let the law work for you!" "You'll find out later that such phrases often involve bankruptcy proceedings, which can hurt your credit and cost you attorneys' fees," warns the FTC.

First, it's important to understand your rights as a consumer under the Fair Credit Reporting Act (FCRA). Every consumer has a consumer report that acts as a sort of financial portfolio that credit bureaus and credit reporting agencies sell to employers, insurers, creditors, and the like. The information included in this portfolio ranges from personal loans, credit card applications, to insurance plans and coverage.

More recently, however, the President signed the Fair and Accurate Credit Transactions Act of 2003 (FACTA) on December 4, 2003. The FTC reports that FACTA "makes sweeping changes and additions to the Fair Credit Reporting Act (FCRA). Some of these changes include "making the FCRA's uniform national standards permanent, enhancing protections against identity theft by making it easier to detect this fraud, offering free annual credit reports to consumers, and creating 'adverse action notices'." For more information on the above legislation and your rights, visit the Federal Trade Commission online at www.ftc.gov.

The three main credit bureaus that you should be familiar with are Equifax, Experian, and Trans Union. While these are the three main bureaus, many other exist therefore it's important that if you are denied insurance, credit, or employment due to information from a CRA, the organization denying your application is required to provide the name, address, and telephone number of the CRA. It's important that you locate all of the agencies that harbor your consumer report.

Within your consumer report there are four major categories of information that companies or employers are seeking when purchasing your report, according to the FTC: identification and employment information, payment history, inquiries, and public record information. You have every right to access the information in the report, but you have to ask for it and usually pay a $9.00 fee.

When you access your information you'll see that the identification and employment section includes: "Your name, birth date, social security number, employer, spouse's name, employment history, home ownership, income, and previous address," explains the FTC. Payment history details your connections to various creditors, including amount of credit extended and payment timeline. CRAs also keep records of creditors that have sought out your information within the past year; these records are called inquiries. Finally, information categorized as public record typically includes bankruptcies, foreclosures, or tax liens.

While the only sure formula to improve your credit is an even mixture of time, diligence, and effective budgeting, the FTC offers valuable tools and steps to deal with debt. To read about the guidelines outlined by the FTC, read Debtma's article entitled, "The FTC Offers Four Debt Strategies."

With a solid knowledge of your consumer rights under FACTA and the FCRA, you can begin to research consolidation and credit scams: identifiable characteristics, schemes, and how you're protected and can protect yourself. Read about these useful skills in the Debtma article entitled, "Scams and Safety."

By: Kate Ellis

Get Started Now! and receive a FREE consultation from a certified credit counselor and learn how much money our service can save you.