Take notice: How your credit history can affect your monthly bill
When you apply for things like cable or satellite TV, mobile phone service, or internet service, the company might review your credit report. They can use the information in your credit report to give you less favorable terms, meaning they can charge you more for the service than someone with a better credit history. That’s called risk-based pricing. The law says it’s OK as long as the company lets you know about it by sending you a Risk-Based Pricing Notice.
The FTC says Sprint violated the law because it imposed a monthly fee of $7.99 on customers with a lower credit score and failed to tell them about the negative information in their credit report, as required by law. Sprint has agreed to pay $2.95 million to settle the charges.
A Risk-Based Pricing Notice tells you three important things.
- The less favorable credit terms you received are based on information in your credit report.
- You can get a free copy of your credit report.
- You have a right to dispute mistakes in your credit report.
If you get a Risk-Based Pricing Notice, order a free copy of your credit report and review it. If your credit report contains incorrect information, you can dispute those mistakes. Take these steps:
- Send the credit reporting company a dispute letter. Here’s a sample you can use.
- Send the information provider—the company that provided the information about you to the credit reporting company—a dispute letter. Here’s another handy sample letter.
Here’s another tip: The next time you get your bill, review it to see if there are unauthorized charges. Contact the company about any fees you have questions about. If you can’t resolve the issue, report it to the Federal Trade Commission.