Bad-Credit Laws

Your credit history tells lenders how likely you are to pay them back if they lend you money. If you have bad credit, you may not be able to get into an apartment or secure a loan. In addition, debt collectors may contact you to collect debts and you may get sued. Federal laws protect you from unfair credit reporting or debt collection practices.

Free Credit Report

The Fair Credit Reporting Act gives you the right to receive a free credit report from each of the three major credit bureaus (Experian, Equifax and TransUnion) once every 12 months. You also have the right to receive a free credit report if any lender declines to extend credit to you. Check your credit regularly using these options to make sure there are no errors or omissions, and if you have recently resolved credit problems, check your credit to make sure that your reports reflect the positive change.

Disputing Credit History

If there are items on your credit history that you believe to be incorrect, you can dispute them by sending a letter to the credit bureau explaining why you think the items are incorrect. The credit bureau must then investigate the items and remove them if it determines that you are correct. Credit bureaus cannot remove negative information if the information is accurate and timely. For example, bankruptcy remains on your credit for seven to 10 years following the date of filing.

Debt Collection

The Fair Debt Collection Practices Act prohibits debt collectors from harassing or threatening you. Debt collectors may not call you before 8 a.m. or after 9 p.m. and may not call you with unreasonable frequency. They also may not verbally abuse you by shouting at you or using foul language and may not threaten you with physical harm or with legal action that they are not empowered to take against you.

Avoiding Scams

If you are having credit problems, scammers may try to get you to pay them for "credit repair services." The Federal Trade Commission prohibits credit repair services from collecting fees upfront before consulting with you about your credit or performing work on your behalf. You should also avoid any service that claims to be able to remove accurate negative information from your credit report. It is not legal to do so, and following the advice of this type of credit service can land you in legal trouble.