A good credit rating is very important. You should regularly review statements for any electronic fund transfers and credit billing. It is possible for these documents to contain errors that could negatively affect your credit status or show unauthorized transfers or charges. If you discover a mistake or find something that does not add up, contact the companies involved and call attention to the potential problem immediately.

Whenever you turn in applications for credit, employment, insurance, or leases, businesses take a good, hard look at your credit history. As long as you get fair and equal treatment, they can use this information in their decision to grant or deny insurance and credit. Credit problems can crop up for a variety of reasons. Illness, temporary reduction or loss of income, and computer errors can all have a negative impact on your credit rating. Fortunately, it is possible to solve these credit problems. But it may not always happen quickly and easily.

Credit laws in the United States are enforced by the Federal Trade Commission (FTC). Citizens’ rights to get, use and maintain credit are protected by these laws. You should understand that you are not guaranteed to receive credit. Credit laws are there to ensure that you get a fair and equal opportunity to get credit. The laws also protect your right to resolve credit error disputes.

Creditors are not allowed to base their decisions on things like race, marital status, gender, national origin, religion, age or receipt of public assistance. The Equal Credit Opportunity Act (ECOA) protects applicants from these types of discriminatory practices. It’s alright for creditors to request this information (except for religion), they just cannot use it to discriminate against you.

You are protected by the ECOA when dealing with a full range of companies. Banks, stores, credit unions, credit card companies and small loan and finance companies are all bound by the provisions of the ECOA. Even real estate brokers involved with the arrangement of financing are required to obey the provisions of this law. Also, businesses themselves are protected under the ECOA when they apply for credit of their own.

So why is your credit rating important? Because it is the yardstick by which your creditworthiness is measured. Companies can no longer profile applicants by sex, marital status, age or other external factors. The ECOA also requires companies that deny your application to give a reason why. The easiest way for them to do this is to make decisions based on your credit rating.

If circumstances are affecting your ability to pay bills, get in touch with your creditors right away. You should be able to agree on some sort of modified plan that will reduce your monthly obligations to a level you can manage. Do not ignore the problem hoping it will go away. When you start hearing from a debt collector, you will end up having fewer options.