|
 |
The First Step - Applying for
Credit... Page 2
continued
1. Truth-in-Lending Act
The federal Truth-in-Lending Act was enacted to help consumers make better decisions about
credit. It was also designed to prevent the credit industry from abusing credit cost
disclosure statements -- the fine print you're supposed to read. Lenders or grantors of
credit are now required by law to provide you with detailed information about your terms
of credit. Disclosures must be clear, concise, and openly available to consumers.
Specifically, they must address:
- The amount being financed.
- The annual percentage rate (APR).
- The number and amount of monthly payments.
- The method of balance calculation as it applies to
finance charges.
- The number of days in the grace period before
payment must be made.
- Any annual fees that are applicable to the account.
- The size of the credit line and who actually issues
it.
- The cost of credit insurance, if you apply for it,
and how your debts will be paid if should you pass away.
2. Equal Credit Opportunity Act (ECOA)
Many allegations of discrimination have been reported by women who are denied credit
because of their gender or marital status. The Equal Credit Opportunity Act (ECOA) was
enacted to prevent such acts of unfairness. The ECOA "prohibits credit discrimination
on the basis of sex, race, marital status, religion, national origin, age, or receipt of
public assistance". Creditors aren't allowed to use any of this information against
you, period.
According to the Equal Credit Opportunity Act:
- You have the right to have "public assistance
considered in the same manner as other income". In other words, welfare or other
recipients can't be denied credit based solely on the source of their income.
- If you're denied credit, you have a "legal
right" to know why. The creditor must give you a notice "that tells you the
specific reasons your application was rejected or the fact that you have the right to
learn the reasons if you ask within 60 days.
Credit and Debt Calculators:
------------------------------
• Should I pay off debt or
invest in savings?
• What will it take to pay off my balance?
• Should I consolidate my
debts?
• How Much Am I Spending?
|
