Credit Issues

Learn about common credit issues.

Bank and Credit Product Complaints

If you have a problem with your bank, financial institution, lender, broker, or any other financial service provider, you should report it. To guide you through the process of filing these types of complaints, the Federal Reserve offers consumer help and the following tips:

  • First, try to resolve it with the manager at the branch location, the customer service hotline, or the institution's website.
  • When filing your complaint, clearly explain your problem and how you would like it to be resolved.
  • Be sure to have copies of receipts, checks, or other proof of the transaction.

If you don't get your problem resolved using these steps, you have the right to get help from the correct regulatory agency.

Complaints About Deposit Accounts

Financial institutions are regulated by different government agencies, depending on how the institution was chartered.

Use the Federal Reserve System's financial institution search tool to find out which agency accepts complaints about the financial institution you need to file a complaint against. The Federal Deposit Insurance Corporation offers the contact information for the primary federal agencies that regulate financial institutions.

Complaints About Other Financial Services

Maybe your problem doesn't involve a traditional bank or credit union or isn't related to bank accounts or fees, but is related to credit or other financial services. The Consumer Financial Protection Bureau investigates complaints involving loan products, such as mortgage companies, car loans and leases, student loans, payday loans, and any other consumer loans. This agency also accepts complaints about other financial services, such as credit cards, prepaid cards, money transfers, and debt collection.

If you need to file a complaint about an investment, such as a fraud, pyramid scheme, or other violation of federal securities laws, submit your problem to the Securities and Exchange Commission. You may also submit a complaint with your state's securities regulator.

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Home Equity Loans

A home equity loan is a form of credit where your home is used as collateral to borrow money. It's typically used to pay for major expenses (education, medical bills, and home repairs). However, if you cannot pay back the home equity loan, the lender could foreclose on your home. 

Types of Home Equity Loans

There are two types of home equity loans:

  • Lump sum - A one-time, closed-end loan that usually has a fixed interest rate.
  • Revolving line of credit - You can withdraw the funds at any time for more flexibility. These usually have adjustable interest rates.

For further information about home equity loans, refer to What You Should Know about Home Equity Lines of Credit, a guide by the Federal Reserve Board. 

Talk to a Qualified Credit Counselor

You should consider carefully before taking out a home equity loan. If you are unable to make payments on time, you could end up losing your home. Before taking out a home equity loan, you should explore alternatives with a credit counselor that do not potentially put your home at the risk of a forced sale. 

File a Complaint

If you have a problem with a home equity loan, you should contact the lender first. If you cannot resolve the issue with the lender, file a complaint with the Consumer Financial Protection Bureau (CFPB). 

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Personal Loans

Loans provide you with money you might not currently have for large purchases and let you pay back the money over a certain period of time. There are many types of loans available, such as home loans, car loans, and student loans for higher education expenses. Loans are divided into two categories: secured and unsecured. 

Secured Loans

With secured loans, your property and things you own are used as collateral. If you cannot pay back the loan, the lender will take your collateral to get their money back. Common secured loans include mortgages, home equity loans, and installment loans.

Mortgages

A mortgage represents a loan to buy a home. Fixed-rate and adjustable-rate mortgages are the two main types of mortgages, but there is a wide variety of mortgage products available. Sources for mortgage loans include mortgage banks, mortgage brokers, banks, thrift and credit unions, home builders, real estate agencies, and Internet lenders. When shopping for a home mortgage, you should consider contacting several lenders or brokers to compare offers.    

If you miss your mortgage payments, foreclosure may occur. This provides the legal means for your lender to repossess your home. Foreclosures have a negative impact on your credit history. Beware of predatory loans: abusive and deceptive mortgage lending practices that strip borrowers of home equity and threaten families with foreclosure.

Home Equity Loans

A home equity loan is a form of credit where your home is used as collateral to borrow money. It's typically used to pay for major expenses (education, medical bills, and home repairs). However, if you cannot pay back the loan, the lender could foreclose on your home. 

There are two types of home equity loans:

  • Lump sum. A one-time, closed-end loan that usually has a fixed interest rate.
  • Revolving line of credit. You can withdraw the funds at any time for more flexibility. These usually have adjustable interest rates.

For further information about home equity loans, refer to What You Should Know about Home Equity Lines of Credit, a guide by the Federal Reserve Board

Installment Loans

With an installment loan, a borrower repays the loan over time with a set number of scheduled payments. Home and car loans represent the most common installment loans. Before you sign an agreement for a loan to buy a house, a car, or other large purchase, make sure you fully understand all of the lender's terms and conditions, including:

  • The dollar amount you are borrowing.
  • The payment amounts and when they are due.
  • The total finance charge, including all interest and fees you must pay to get the loan.
  • The APR, the rate of interest you will pay over the full term of the loan.
  • Penalties for late payments.
  • What the lender will do if you cannot pay back the loan.
  • Penalties if you pay the loan back early.

The Truth in Lending Act requires lenders to provide you this information so you can compare different offers. 

Unsecured Loans

Unsecured loans do not use property as collateral. Lenders consider these as more risky than secured loans, so they charge a higher rate of interest for them. Two common unsecured loans are credit cards and student loans.

Credit Cards

Credit cards allow you to pay for products and services now, but you need to repay the balance before the end of your billing cycle to avoid paying interest for your purchase. A credit card company sets a credit limit on how much you can charge on your card when it issues the card to you. When applying for credit cards, it's important to shop around. Fees, interest rates, finance charges, and benefits can vary greatly.

For further information on choosing a credit card, visit:

Student Loans

Student loans are available from a variety of sources, including the federal government, individual states, colleges and universities, and other public and private agencies and organizations. To help pay for higher education expenses, students and parents can borrow funds that must be repaid with interest. As a general rule, federal loans have more favorable terms and lower interest rates than traditional consumer loans.

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