How To

Quiz: How Well Do You Know Your Credit Rights?

(photo: sterlic)

I’ve been writing for Mint.com since July 2010 and I’ve covered credit law several times in my articles. Now, let’s see if you’ve been paying attention. Below are 5 multiple choice questions that cover the Fair Credit Reporting Act, Fair Debt Collection Practices Act, and the CARD Act.  The answers are at the end. Good luck and don’t cheat!

1. Credit Reporting Agencies will be violating the law if…

A.  They have incorrect information on your credit reports

B.  They refuse to carry out a consumer dispute

C.  They disclose a copy of your credit report to a 3rd party without your permission

D.  All of the above

E.  None of the above

2. Banks will be violating the law if…

A.  They place incorrect information on your credit reports

B.  They pull your credit files without written or oral permission

C.  They refuse to show disputed accounts as being “in dispute” on credit reports

D.  All of the above

E.  None of the above

3. Collection Agencies will be violating the law if…

A.  They call you at work

B.  They discuss your debt with your spouse

C.  Report the collection to the credit reporting agencies without notifying you first

D.  Add interest to the original dollar amount of the debt

E.  None of the above

4. Credit Card Issuers will be violating the law if…

A.  They raise your interest rate on all future charges

B.  They raise your interest rate on existing balances

C.  They implement a new annual fee

D.  They try and charge you more than 29.99% interest, ever

E.  All of the above

5. Free Credit Report offers will be violating the law if…

A.  They do not overtly disclose that you can get free credit reports at annualcreditreport.com

B.  They take a credit card number and charge you after a trial period has expired

C.  They cross sell you “marketing scores” instead of your real credit scores

D.  They only allow you to view your credit report online for 30 days

E.  None of the above

ANSWER TO NUMBER 1:  E. None of the above.

Simply having incorrect information on your credit report isn’t an unlawful act. If you notify them that it’s incorrect and they refuse to correct it, and then they share it with a lender… that’s illegal. And, your permission is not required to disclosure your credit report to a 3rd party. Finally, if they determine that your dispute is frivolous or irrelevant then they can ignore it.

ANSWER TO NUMBER 2:  C. They refuse to show disputed accounts as being “in dispute” on credit reports.

Simply placing incorrect information on your credit report isn’t an unlawful act. If you notify them that it’s incorrect and they refuse to correct it… that’s illegal. Banks can sell your defaulted debts to debt buyers or collection agencies without your permission. The Fair Credit Reporting Act requires that “furnishers” of items in dispute shown them as being “disputed” on your credit reports while the investigation is in process.

ANSWER TO NUMBER 3:  B. They discuss your debt with your spouse.

Collectors may call you at work unless you instruct them not to do so. They can also freely report the debts to the credit reporting agencies. They can also charge interest on the debt. But, they can’t talk about it with your spouse. The FDCPA (Fair Debt Collection Practices Act) mandates that collectors NOT discuss the details of outstanding debts with anyone but the debtor or his/her attorney.

ANSWER TO NUMBER 4: B. They raise your interest rate on existing balances.

Credit card issuers can still raise interest rates on future charges as long as they give you 45 days advance notice (there are some exceptions when they don’t have to give you notice). They can also implement a new annual fee under the same conditions and there is no cap on interest rates. But, they can no longer raise interest rates on existing balances.

ANSWER TO NUMBER 5: A. They do not overtly disclose that you can get free credit reports at annualcreditreport.com.

Taking a credit card and charging you for a subscription once a trial period has ended has gotten criticism for being deceptive but apparently it’s not illegal because many companies still do it.  And, you are almost never sold your real credit scores on any website, and that’s not illegal.  It is also not illegal to only display your credit report online for 30 days, so you better print it!

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger forMint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow him on Twitter here.