Federal Trade Commission | ftc.gov

Credit and Your 

Consumer Rights

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A good credit rating is very important. Businesses inspect your credit history when they evaluate your 

applications for credit, insurance, employment, and even 

leases. They can use it when they choose to give or deny 

you credit or insurance, provided you receive fair and 

equal treatment. Sometimes, things happen that can cause 

credit problems: a temporary loss of income, an illness, 

even a computer error. Solving credit problems may take 

time and patience, but it doesn’t have to be an ordeal. 

The Federal Trade Commission (FTC) enforces the credit 

laws that protect your right to get, use and maintain 

credit. These laws do not guarantee that everyone will 

receive credit. Instead, the credit laws protect your rights 

by requiring businesses to give all consumers a fair and 

equal opportunity to get credit and to resolve disputes over 

credit errors. This brochure explains your rights under 

these laws and offers practical tips to help you solve credit 

problems.

Your Credit Report

Your credit report contains information about where you 

live, how you pay your bills, and whether you’ve been 

sued, or filed for bankruptcy. Credit reporting companies 

sell the information in your report to businesses that use 

it to evaluate your applications for credit, insurance, 

employment, or renting a home. 

The federal Fair Credit Reporting Act (FCRA) promotes 

the accuracy and privacy of information in the files of the 

nation’s credit reporting companies. 
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Under the Fair Credit Reporting Act:

► You have the right to receive a copy of your credit 

report. The copy of your report must contain all the 

information in your file at the time of your request. 

► Each of the nationwide credit reporting companies – 

Equifax, Experian, and TransUnion – is required to 

provide you with a free copy of your credit report, 

at your request, once every 12 months. For details, 

see Free Credit Reports at consumer.ftc.gov. 

► Under federal law, you’re also entitled to a free 

report if a company takes adverse action against 

you, like denying your application for credit, 

insurance, or employment, and you ask for your 

report within 60 days of receiving notice of the 

action. The notice will give you the name, address, 

and phone number of the credit reporting company. 

You’re also entitled to one free report a year if 

you’re unemployed and plan to look for a job within 

60 days; if you’re on welfare; or if your report is 

inaccurate because of fraud, including identity theft. 

Your Credit Application

When creditors evaluate a credit application, they cannot 

engage in discriminatory practices. 

The Equal Credit Opportunity Act (ECOA) prohibits 

credit discrimination on the basis of sex, race, marital 

status, religion, national origin, age, or receipt of public 

assistance. Creditors may ask for this information (except 

religion) in certain situations, but they may not use it to 

discriminate against you when deciding whether to grant 

you credit. 
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The ECOA protects consumers who deal with companies 

that regularly extend credit, including banks, small loan 

and finance companies, retail and department stores, 

credit card companies, and credit unions. Everyone who 

participates in the decision to grant credit, including real 

estate brokers who arrange financing, must follow this 

law. Businesses applying for credit also are protected by 

this law. Under the Equal Credit Opportunity Act:

► You cannot be denied credit based on your race, 

sex, marital status, religion, age, national origin, or 

receipt of public assistance. 

► You have the right to have reliable public assistance 

considered in the same manner as other income.

► If you are denied credit, you have a legal right to 

know why. 

For details, see Your Equal Credit Opportunity Rights at 

consumer.ftc.gov.

Your Credit Billing and Electronic Fund 

Transfer Statements

It is important to check credit billing and electronic 

fund transfer account statements regularly because these 

documents may contain mistakes that could damage your 

credit status or reflect improper charges or transfers. If 

you find an error or discrepancy, notify the company and 

dispute the error immediately. The Fair Credit Billing 

Act (FCBA) and Electronic Fund Transfer Act (EFTA)

establish procedures for resolving mistakes on credit 
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billing and electronic fund transfer account statements, 

including:

► charges or electronic fund transfers that you – or 

anyone you have authorized to use your account – 

have not made; 

► charges or electronic fund transfers that are 

incorrectly identified or show the wrong date or 

amount; 

► math errors; 

► failure to post payments, credits, or electronic fund 

transfers properly; 

► failure to send bills to your current address – 

provided the creditor receives your change of 

address, in writing, at least 20 days before the 

billing period ends; 

► charges or electronic fund transfers for which 

you ask for an explanation or written proof of 

purchase along with a claimed error or request for 

clarification.

The FCBA generally applies only to “open end” credit 

accounts – credit cards and revolving charge accounts, 

like department store accounts. It does not apply to loans 

or credit sales that are paid according to a fixed schedule 

until the entire amount is paid back, like an automobile 

loan. The EFTA applies to electronic fund transfers, like 

those involving automatic teller machines (ATMs), pointof-sale debit transactions, and other electronic banking 

transactions.

For details, see Fair Credit Billing and Electronic Banking 

at consumer.ftc.gov.
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Your Debts and Debt Collectors

You are responsible for your debts. If you fall behind 

in paying your creditors, or if an error is made on your 

account, you may be contacted by a “debt collector.” A 

debt collector is any person, other than the creditor, who 

regularly collects debts owed to others, including lawyers 

who collect debts on a regular basis. You have the right to 

be treated fairly by debt collectors.

The Fair Debt Collection Practices Act (FDCPA) applies 

to personal, family, and household debts. This includes 

money you owe for the purchase of a car, for medical 

care, or for charge accounts. The FDCPA prohibits debt 

collectors from engaging in unfair, deceptive, or abusive 

practices while collecting these debts. Under the FDCPA: 

► Debt collectors may contact you only between 8 

a.m. and 9 p.m. 

► Debt collectors may not contact you at work if they 

know your employer disapproves. 

► Debt collectors may not harass, oppress, or abuse 

you. 

► Debt collectors may not lie when collecting debts, 

such as falsely implying that you have committed a 

crime. 

► Debt collectors must identify themselves to you on 

the phone. 

► Debt collectors must stop contacting you if you ask 

them to do so in writing. 

For details, see Debt Collection at consumer.ftc.gov.
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Solving Your Credit Problems

Your credit report can influence your purchasing power, 

as well as your opportunity to get a job, rent or buy an 

apartment or a house, and buy insurance. When negative 

information in your report is accurate, only the passage 

of time can assure its removal. A credit reporting 

company can report most accurate negative information 

for seven years and bankruptcy information for 10 years. 

Information about an unpaid judgment against you can be 

reported for seven years or until the statute of limitations 

runs out, whichever is longer. There is no time limit 

on reporting information about criminal convictions; 

information reported in response to your application for a 

job that pays more than $75,000 a year; and information 

reported because you’ve applied for more than $150,000 

worth of credit or life insurance. There is a standard 

method for calculating the seven-year reporting period. 

Generally, the period runs from the date that the event 

took place.

If you are having problems paying your bills, contact 

your creditors immediately. Try to work out a modified 

payment plan with them that reduces your payments to a 

more manageable level. Don’t wait until your account has 

been turned over to a debt collector.

Here are some additional tips for solving credit problems:

► If you want to dispute a credit report, bill or credit 

denial, write to the appropriate company and send 

your letter “return receipt requested.”

► When you dispute a billing error, include your 

name, account number, the dollar amount in 
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question, and the reason you believe the bill is 

wrong. 

► If in doubt, request written verification of a debt. 

► Keep all your original documents, especially 

receipts, sales slips, and billing statements. You will 

need them if you dispute a credit bill or report. Send 

copies only. It may take more than one letter to 

correct a problem. 

► Be skeptical of businesses that offer instant solutions 

to credit problems: There aren’t any.

► Be persistent. Resolving credit problems can take 

time and patience. 

► There is nothing that a credit repair company can 

charge you for that you cannot do for yourself for 

little or no cost.

If you’re not disciplined enough to create a workable 

budget and stick to it, work out a repayment plan with 

your creditors, or keep track of mounting bills, consider 

contacting a credit counseling organization. Many credit 

counseling organizations are nonprofit and work with 

you to solve your financial problems. But not all are 

reputable. For example, just because an organization says 

it’s “nonprofit,” there’s no guarantee that its services 

are free, affordable, or even legitimate. In fact, some 

credit counseling organizations charge high fees, or hide 

their fees by pressuring consumers to make “voluntary” 

contributions that only cause more debt.

Most credit counselors offer services through local 

offices, the Internet, or on the telephone. If possible, 

find an organization that offers in-person counseling. 

Many universities, military bases, credit unions, housing 
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authorities, and branches of the U.S. Cooperative 

Extension Service operate nonprofit credit counseling 

programs. Your financial institution, local consumer 

protection agency, and friends and family also may be 

good sources of information and referrals.

Reputable credit counseling organizations can advise 

you on managing your money and debts, help you 

develop a budget, and offer free educational materials 

and workshops. Their counselors are certified and 

trained in the areas of consumer credit, money and debt 

management, and budgeting. Counselors discuss your 

entire financial situation with you, and help you develop 

a personalized plan to solve your money problems. An 

initial counseling session typically lasts an hour, with an 

offer of follow-up sessions. 

For more information, see Coping with Debt at 

consumer.ftc.gov. 

The FTC works to prevent fraudulent, deceptive and 

unfair business practices in the marketplace and to provide 

information to help consumers spot, stop and avoid them. 

To file a complaint or get free information on consumer 

issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP 

(1-877-382-4357); TTY: 1-866-653-4261. 

Watch the video, How to File a Complaint, at 

consumer.ftc.gov/media to learn more. The FTC 

enters consumer complaints into the Consumer Sentinel 

Network, a secure online database and investigative tool 

used by hundreds of civil and criminal law enforcement 

agencies in the U.S. and abroad.

Federal Trade Commission

ftc.gov

April 2013