Consumer Credit Rights & Obligations

Knowing your credit rights can help you avoid unexpected high-interest debt and prevent errors in your credit file. However, consumers, creditors and credit bureaus have obligations to fulfill before consumer-protection laws can be effective. Protecting your credit rights begins with reading through all of a card issuer's account terms.

Disclosure

Creditors and lenders are required to accurately disclose credit card terms to their customers under the U.S. Fair Credit and Charge Card Disclosure Act. However, credit card holders still need to be diligent about keeping track of changes in terms. For instance, if you're offered a low introductory interest rate for a new card, find out how high your rate will be after the initial rate expires before opening the account. The rate could more than double and make the card unaffordable if you rack up interest charges by carrying a balance on it from month to month.

Errors

Credit bureaus are obligated to maintain accurate credit reports, but consumers are responsible for notifying the bureaus about errors they find in their credit files under the U.S. Fair Credit Reporting Act. The bureaus investigate error reports they receive from consumers by contacting appropriate creditors or lenders to verify the disputed information. However, it is the consumer's obligation to provide enough documentation to prove the information is erroneous. If the error is not removed due to lack of documentation, consumers have the right to add a brief statement to their credit files addressing the information in question. That statement should clarify the issue, but it's not intended to serve as an explanation for credit problems.

Corrections

When corrections are made to their credit files or billing statements, consumers can request that credit bureaus redistribute corrected reports to lenders and potential employers who recently accessed their credit files before corrections were made. Credit file errors can prevent people from opening new credit accounts, and some employers reject job applicants based on negative information in their credit reports. The U.S. Fair Credit Billing Act also requires credit card companies to correct billing mistakes to prevent damage to customers' credit scores.

Rates

The U.S. Credit Card Accountability, Responsibility and Disclosure Act includes several consumer protections, especially concerning credit card rates. For example, a card issuer generally can't increase the interest rate on customers' existing balances. Issuers can increase the rate for new transactions, but they must notify customers about the increase 45 days before it takes effect.

Marketing

Those not interested in receiving unsolicited offers from credit card companies and insurance agencies can request that credit-reporting agencies not distribute their names on marketing lists. The national credit-reporting agencies Experian, Equifax and TransUnion provide a toll-free phone number that allows consumers to remove their names from such lists. However, removal requests made only by phone remain in effect for five years, while written requests are permanent.