It is important to know all about your rights, responsibilities, and liabilities as a borrower before you approach any money lender for a loan. It will help you to deal and bargain with your creditor with more confidence and in a better manner.
The first thing that you should know that your rights as a borrower are never revoked or nullified even if you are in a crunchy financial situation and have asked for help from different credit counselors and debt relief agencies to manage your debt and handle disputes. What is more, you still have your rights intact even after you file for any type of bankruptcy.
About your rights
According to the Fair Credit Reporting Act or FCRA, you are provided with a few specific rights with regards to your credit report. These rights include the following:
- You have the right to know about the contents in your file
- You have the right to ask for a copy of your credit report
- If there is any error or dispute then you have the rectify and challenge it
- You also have the right to remove any incorrect information in your credit report
- If there is an older or negative information in your credit report you have the right to have it excluded from it
- You have the right to access your credit report limited and
- You can give or deny consent to give your credit report to your employer.
All these rights are for a common person. However, there are a few additional rights for any victims of fraud and for the military personnel. You will find it all on the website of The Federal Trade Commission or even at libertylending.com
Know your responsibilities
With regards to your responsibilities as a borrower towards the companies issuing and offering you credit, there are a few basic ones that will help you to maintain a good credit score.
- First and foremost, you must read the fine print carefully and understand all the terms and conditions of your loan agreement. This is must be done before you signup because once you sign there will be no recourse. Therefore, when it comes to borrowing make sure that you know about the interest rates, fees, and other charges, a tenure of your loan, amount you have to pay back monthly and lots more.
- Check all your statements as well especially whether all the data and information to find out whether these are correct or not. If not, then you must immediately notify your creditor about it. Therefore, it is prudent to retain your receipts of monthly statements and reconcile it from time to time meticulously.
- You must always pay back on time. The primary purpose of the creditor to give a loan is to help you to “buy now pay later.” They are doing you a favor in good faith and it is elementary that you act in your good faith as well. You are legally obligated to repay that money back to the creditor within the scheduled time frame as you have agreed to while signing the loan contract. If you miss any payment or continue to pay late it will surely and essentially damage your credit rating.
- Your contact information must be updated as soon as there is any change in it. If you have to move out or change your address temporarily for occupational or any other reasons, you must immediately notify your creditor about such changes. This will ensure that your monthly bills reach at the right address on time so that you can make the payments. If you do not intimate the creditors then they will keep on sending the bills at your old address. This might give you a break but rest assured it will be short lived. It is your responsibility to keep your creditors in the loop or face legal consequences due to non-compliance.
- It goes without saying that you must repay the entire amount borrowed from your creditor and that too on time to avoid penal and other overdue charges. Repaying the full debt on time will also help you to maintain a good credit score. Remember, when you signed the agreement before borrowing you have made a legally binding promise to repay the borrowed amount along with interest and other charges as and when levied on it on time. If you do not, you have also agreed to face legal prosecution and abide by the judgment passed.
- In case you have misplaced your credit card or it is stolen you must inform the credit card issuer immediately. They will block the card and prevent it from any misuse by any other person who may have it currently. Remember, if such a person uses it before you inform the issuer you are liable for such payments irrespective of the fact that you have not used even a single cent of the money. In such situations, the credit card issuer may hold you liable for a nominal amount for card loss and has the right to know if anyone else is using the card to make deceitful purchases.
Knowing your rights and responsibilities will enable you to use your credit sensibly, cautiously and judiciously. You will be able to make a meticulous plan and follow a specific strategy to repay your debt on time and successfully.
Have a proper budget
The best way to repay your loan is to have a budget in place. Your budget will enable you to make any changes necessary when you find that you are facing a problem in repaying your loan. A budget usually includes all your income and expenditures. Analyzing it you will be able to find out those expenses that are not essential and you can do without it for the time being. If you postpone these expenses till the time you regain your financial health you can easily follow the repayment schedule preventing any damage to your credit score.
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