Yesterday in my office we had a debate on why I give my clients a copy of their credit report and that lead into a discussion of the laws the protect and govern credit.  And while a review of these 3 laws would take thousands upon thousands of words, being the brave or foolish blogger that I am, How about the HIGHLIGHTS if you will

• EQUAL CREDIT OPPORTUNITY ACT (ECOA)

passed in 1974 to ensure all consumers are given the equal opportunity to obtain credit.  This act was originally based on sex or martial status and was amended in 1976 to include race,age,color national origin.  This is also where Regulation B comes from.  In other words, it is illegal to  ask about your sex,marital status, national origin or religion.  I may not ask if you have a phone in your name.  I may not consider the racially make of of the neighborhood.  The only reason I may inquire about your age is if you are to young to sign legal documents. 

I may not use any judgmental system to evaluate your credit worthiness unless it is an "empirically derived, demonstrably and statistically sound credit scoring system.

A few special interesting items in this act.........

As a lender we must notify you in writing of any adverse action taken on your application and generally within 30 days.

Also, starting in December of 1993 if you ask for a copy of an appraisal, I am required to provide it to you with in 30 days regardless if your loan was approved or denied.

• FAIR CREDIT REPORTING ACT (FCRA)

Simple right????  This act came to be in 1996 and allows for you to receive a (now) free copy of your credit report every year.  It requires the reporting agencies to treat your credit information with confidentially and accuracy.  It gives you the right to dispute negative items and outlines the dispute process.  It also set up a time limit for negative information to be purged from your credit report.  Most negative information is to be removed after 7 years, but bankruptcy is 10 years.

• FAIR & ACCURATE CREDIT TRANSACTIONS ACT (FACTA)

Passed in 2003 this act, brings even more to you to help fix negative information.  Before you had to go to the reporting agency, now we can go to the provider.  Personally, I still advise you to go to the reporting agency, because that way it gets fixed permanently.  If we go to the provider it only gets fixed on that report.  This act gives you the right to request a copy of your credit report from me and it also set into play some important consumer protection to help fight identity theft.  This act set in place the "opt out" feature and allows you to put into your credit file a "fraud alert".