What Are Some of the Warning Signs of Debt?

warning signs of debt

Are you struggling financially? Maybe you are having difficulty making payments on your loans or credit card bills. Using credit can allow you buy a vehicle, home and send your kid to college, but it can also pose serious problems in your life. Even if you are making minimum monthly payments, you still could be at risk for problems. Here are some of the warning signs that you might have too much debt:

  • At least one of your credit cards is near the limit
  • Making just minimum monthly payments on credit cards
  • Using credit cards to buy essentials like groceries or pay your utility bills
  • Taking out payday loans
  • You have no savings whatsoever
  • Overdrawing your checking account
  • Your relationships are affected by your debt

Steps to Take to Get Debt Under Control

You should take steps now to get your debt situation under control if you have several of the above warning signs of debt.  If you are struggling with debt, then you might have missed payments or high balances, which affects your credit. You should also work on resolving these issues as having lousy credit can influence everything from insurance rates to employment prospects.

Here are some things that you can do to tackle your debt situation and improve your credit:

  1. Start by examining your credit report – Under the Fair Credit Reporting Act or FCRA, you are entitled to a free credit report each year from the major credit reporting agencies.
  2. Make sure debt listed on your credit report is accurate – If you have inaccurate information on your credit report, dispute it. Under the FCRA, you are allowed to challenge any incorrect information in your credit file.
  3. Make sure inaccurate items are removed from your report – If you file a dispute and the credit reporting agencies do not remove the false information, then you should contact an FCRA attorney for assistance.
  4. Stop using your credit cards – This is essential if you are serious about getting out of debt.
  5. Make all payments on time.
  6. Pay off your debt – Work hard on paying off the higher interest debts. This will help you get out of debt sooner.

With the above steps, you can work on improving your credit and getting out of debt. It takes discipline and patience to get out of debt. Make sure that you continually check your credit report for errors and ensure that all information reported is correct. This will help you maintain good credit.

What is the FCRA Compliance?

The Fair Credit Reporting Act is a U.S. federal law that was passed more than 40 years ago by Congress. This legislation provides several protections to consumers. It was initially established to protect them from unfair consumer credit reporting practices. The FCRA has been amended several times throughout the years and now provides many more protections for consumers.

The FCRA also regulates information used for employee background checks. When an employer conducts a background check on a potential employee using a third party, they must comply with FCRA rules. Here are some of the things that employers must do to stay in compliance with the FCRA when running background checks:

  • Have a permissible purpose – Background checks or consumer credit reports cannot be pulled for just any reason. There must be a permissible purpose. Running a background check to determine a candidate’s suitability for employment is considered to be a permissible purpose.
  • Gain authorization – An employer must have written permission from the applicant to run a background check.
  • Provide disclosure – Employers must provide a written declaration that states that a background check is required for employment.
  • Adverse action – If an employer denies employment to a candidate based on information obtained in a background check, they must provide a written notice that lets the individual know the name, telephone number and address of the background screening company. Employers must also provide information on how to dispute incorrect information in the report.

If you were passed over on a job because of negative things in your credit report and you believe that the employer or credit reporting agency violates your rights, you have the right to file a complaint or even sue for damages. Contact an FCRA attorney to determine if you have a case.

What is Permissible Purpose Under the FCRA?

The Fair Credit Reporting Act is legislation that protects consumer’s rights to fair and honest information being reported about them in consumer credit reports. The FCRA also protects consumers rights to keep personal information on their credit reports private. The FCRA does this by restricting access to consumer credit reports.  The FCRA bars people from seeing your credit report without “permissible purpose.”

What is a permissible purpose? Permissible purpose prevents anyone from seeing you’re viewing your credit report unless they have a legitimate need to see it. Here are some examples of acceptable reasons for pulling your credit:

  • You provide written permission for your credit to be pulled.
  • You are applying for employment, and the employer requires background checks as a condition of employment.
  • You apply for a loan. The loan company or bank must evaluate your credit to determine your creditworthiness.
  • A utility company requires your credit history to provide you with service.
  • You provide permission for a landlord to pull credit history as part of the rental application.

So, your in-laws can’t just view your credit because they are curious. Anyone who obtains a credit report of another person must have a permissible permission. Otherwise, it is a violation of the FCRA.

FCRA Violations

The FCRA, or the Fair Credit Reporting Act, protects consumers against misreporting of relevant information by consumer credit reporting agencies and others. When your data is falsified on your credit report, it can carry serious consequences, such as being turned down for a job, car or loan. Here are some of the most common FCRA violations that you should be on the lookout for:

  • Listing you as the debtor for an account when the account was not in your name or when you were only an authorized user.
  • Reporting old debt as new
  • Failing to report that debt was discharged in bankruptcy
  • Reporting a debt as charged-off when you paid it in full.
  • Reporting on-time payments as being late
  • Listing an account as still being open when you closed it
  • Mixing up your credit file with someone else who has a similar name or social security number
  • Failing to take action when you dispute something on your credit report
  • Disclosing information about you to someone without your permission
  • Failing to notify you that adverse action has been taken based on your credit

If a creditor, information user or a credit bureau committed any of the above FCRA violations, then you might be entitled to sue them in court. You could receive compensation for damages and attorney’s fees.

FCRA Summary

The Fair Credit Reporting Act, or the FCRA, promotes the truthful, accurate and privacy of information in your credit file. You have some rights under the FCRA including:

  • You have the right to review your credit file. You can obtain a copy of your credit report from Transunion, Equifax, and Experian through AnnualCreditReport.com for free once per year.
  • You have the right to know if an adverse action has been taken against you because of something in your credit file. If you have been denied a loan, employment or insurance because of your credit history, then the business that took the adverse action must provide you with the name, address and telephone number of the credit agency that supplied the information.
  • You have the right to dispute incorrect or old information that should not be in your file.
  • You have the right to an investigation. Credit reporting agencies are responsible for investigating disputed information.
  • You have the right to have incorrect or false information removed from your credit report.
  • You have the right to sue for damages and compensation when your rights are violated under the FCRA.
  • You are entitled to damages and attorney’s fees if an FCRA violation has occurred.
  • You have the right to have information on your credit file kept private. Businesses must have a “permissible purpose” to access your data.
  • Members of the military have even more rights. It is best to contact an FCRA attorney for assistance if you are in the military.

You can make an FCRA claim if your rights have been trampled on under the FCRA. Contact an FCRA attorney to learn what options are available.

FCRA Lawsuit

The FCRA is a law that was passed by Congress to protect your rights to fair, accurate consumer credit reporting. The rule, called the Fair Credit Reporting Act, has been updated several times since it was passed in 1970. It offers many protections in addition to the above, including:

  • The right to know what is on your credit report.
  • The right to keep information on your credit file private.
  • The right to dispute negative information and have it removed.

If your rights are violated under the FCRA, you are entitled to file a lawsuit. Here are some of the remedies available under the FCRA:

  • Damages – If you can prove that your rights were willingly violated by an entity using your credit file, a creditor or a credit reporting agency, then you might be able to recover actual or statutory damages. There is no limit to the number of actual damages that you can obtain for a willful violation. You might be able also to recover punitive damages if the negligence was especially damaging.  
  • Attorney’s fees and costs – When an FCRA violation occurs, the entity or individual that violated the law must pay all reasonable attorney’s fees and expenses.

It is best to contact an FCRA attorney to determine if you have grounds for a case. It is best not to wait as you only have a limited amount of time to file an FCRA lawsuit.

Back to Top