Know Your Consumer Rights and Responsibilities
Knowing your rights and responsibilities as a borrower helps you deal with your lender. Even if you seek help to manage debt or handle disputes, or if you file for bankruptcy, you have rights as a borrower.
The Fair Credit Reporting Act (FCRA) gives you certain rights with respect to your credit report, including the following:
- The right to know what your file contains.
- The right to ask for a credit report.
- The right to dispute information in your credit report.
- The right to have inaccurate information corrected or removed.
- The right to have older, negative information excluded from your credit report.
- The right to have access to your credit report limited.
- The right to have your credit report given to your employer (only with your consent).
Federal Trade Commission offers more information, including additional rights for military personnel and victims of fraud.
As a borrower, you have certain responsibilities to the companies issuing you credit. Upholding these responsibilities is your obligation to your creditors and also helps you maintain a good credit score. Be familiar with your basic responsibilities when using credit:
- Understand the terms of the agreement. It is your responsibility to understand what you are signing up for when it comes to borrowing. Read the fine print regarding interest, fees and other charges.
- Check your statements. Ensure the information on your statement is correct. If not, notify your creditor immediately. Keep your receipts and reconcile to your monthly statements.
- Pay on time. The creditor has loaned you money so you can “buy now pay later.” You are obligated to pay that money back on the scheduled time frame to which you have agreed. Missing payments or continually paying late will damage your credit rating.
- Update your contact information. If you move or temporarily change your address, notify your lender(s). Sometimes lenders will give you a break if the bill doesn’t reach you in time, but this latitude won’t last long.
- Repay the full debt. When you borrow, you are borrowing a set amount and you are agreeing to pay interest on the outstanding balance. In the long run, you have to pay the full amount borrowed (principal) plus interest to satisfy the debt. This also includes any associated fees.
- Notify creditors if cards are lost or stolen. Always notify your credit card issuer if your cards are lost or stolen. Your liability is limited to $50, but the creditor has a right to know if someone else is using your card(s) to make fraudulent purchases.