Consumer Credit Laws and How They Affect You

Consumer credit laws protect your right to fair financial treatment. Here’s what you need to be aware of to protect yourself and your credit.

Key Takeaways

Our credit scores influence nearly every aspect of our financial lives, from the type of credit we can access, to our home and auto insurance scores, and even the career opportunities we receive. Consumer credit laws help shield us – and our financial records – from abuse. 

It’s important to understand your basic consumer rights. Otherwise, you might not know if they’ve been violated. Whether you have great credit or you’re just getting started, here are four influential consumer credit laws to be aware of. 

The Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) is a law regulating how credit reporting agencies can collect, use, and share the data in your consumer credit report. Its purpose is to help ensure the accuracy, fairness, and privacy in credit reporting.

Your rights under the FCRA

  • You have the the right to a free copy of your credit report every twelve months from each of the national credit bureaus – Equifax®, TransUnion® and Experian®. You can request your reports at
  • You must be told if the information in your credit report has been used against you (ex: you are denied credit, insurance, or employment). In these cases, you’re also entitled to a free copy of your credit report. 
  • As a consumer, you have the right to dispute errors on your report. Credit bureaus must investigate and remove inaccurate, unverifiable, and outdated information at your request. 
  • The FCRA also restricts outside access to your credit report. Only entities with a specific, “permissible purpose” can check your credit without your written consent. 

The Equal Credit Opportunity Act 

The Equal Credit Opportunity Act (ECOA) is a consumer credit law that prevents lenders from discriminating against borrowers for non-financial reasons.

Specifically, it protects consumers from unfair judgment based on race, color, religion, sex, national origin, marital status, public assistance, age, or for exercising their consumer rights.

Your rights under the ECOA

The ECOA prohibits discrimination in all aspects of a credit transaction. It applies to any organization that may extend you credit – including banks, credit card companies, retail stores, loan and finance companies, and credit unions. 

Fair Debt Collection Practices Act (FDCP)

The Fair Debt Collection Practices Act (FDCP) is a consumer credit law that limits how third-party debt collectors can pursue an unpaid debt. It does not protect debtors from anyone attempting to collect a personal debt. 

Your rights under the FDCP

You’re responsible for the repayment of your debts. But you shouldn’t be abused if you fall behind. Under the FDCP, third-party debt collectors cannot:

  • Call between 9 p.m. and 8 a.m. without your express permission
  • Contact you excessively to annoy or intimidate you
  • Reveal why they’re attempting to contact you to anyone other than your spouse
  • Threaten you with action they do not intend to take (ex: filing a lawsuit)
  • Make false statements or use profane or obscene language
  • Continue contacting you after you’ve requested in writing that they stop

Truth in Lending Act (TILA)

You have the right to know what you’re getting into before you open a new line of credit. The Truth in Lending Act (TILA) is a consumer credit law that defines which information must be disclosed to individuals and businesses who are being offered credit products. 

The purpose of the TILA is to safeguard borrowers from predatory lending and make it easier to compare credit options. It applies to closed-end accounts (like home and auto loans) and open-end accounts (like credit cards).

Your rights under the TILA

 The TILA does not restrict the conditions of a credit agreement. It simply requires lenders to provide specific information up front, including: 

  • Annual percentage rate (APR)
  • Finance charges (like application fees, late charges, and prepayment penalties)
  • A payment schedule
  • Total repayment amount over loan lifetime

The TILA is one of the most important consumer credit laws. It has been amended numerous times since its passage in 1968. One of the most significant amendments is the Credit CARD Act.

The Credit CARD Act requires lenders to disclose vital information when issuing new credit cards. Issuers must disclose interest rates, grace periods, annual fees up front. It also governs how issuers can change interest rates, charge over-the-limit transaction fees, and offer sign-up incentives. 

Don’t settle for anything less than Stellar credit

Consumer credit laws protect your right to fair financial treatment. But many have only been around a few generations, and discriminatory practices from the past still contribute to credit inequities today. 

StellarFi is a public benefit corporation founded on the mission to eradicate systemic and cyclical factors that create and perpetuate poverty and wealth inequality.

By making good credit accessible to anyone that pays bills, individuals and families can gain access to property ownership and other accomplishments that build safety nets and encourage generational financial stability.

Signing up is easy – and secure.  


StellarFi (StellarFinance, Inc.) and its affiliates do not provide financial, tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own financial, tax, legal, and accounting advisors before engaging in any transaction. StellarFi receives a referral fee from the partners mentioned in this article.