How to Understand Credit Laws

College students are consistently bombarded with credit offers the moment they move into the dorm room.¹ According to ex-Federal Reserve Chairman Alan Greenspan, young adults have access to credit at a much earlier age than their parents did. In fact, he advocates that students learn about credit even earlier than in college, specifically at the elementary and secondary school level, in order to head off personal financial problems in the world ahead.² In addition, young adults are not the only ones interested in credit, so are their parents. A survey sponsored by both the Consumer Federation of America and the Financial Planning Association, has found that since the September 11th attacks consumers have increased their interest in debt repayment in order to protect their family's and their own financial stability.¹ Certainly, the wars with both Afghanistan and Iraq, have caused reservists to be called up on active duty, affecting the credit of military families. Additionally, stock market scandals, stock market's ups, and downs, and the volatility of real estate investing have also increased interest in the part of the budget that a family can control, personal debt. All of this interest in personal credit has sparked an interest in the knowledge of how credit laws operate. In fact, "credit" is one of the most googled words. Without your knowledge of how credit laws operate, the credit collection laws can be misused and misinterpreted. Do you know how to arm yourself with knowledge?

Do you know how federal credit laws affect you?

They affect you in the following 3 ways:

1.) Your ability to receive credit at a reasonable rate.

2.) The creditor's ability to collect money on the debt that you owe.

3.) The ability of your creditors to report your credit behavior.

It is important to understand the laws that govern credit, in order for you to receive credit at a reasonable rate.

Federal laws that govern your ability to receive credit include the following:

The Equal Credit Opportunity Act of 1978

The Consumer Credit Protection Act of 1968

The Fair Credit Reporting Act of 1971

The Soldiers and Sailors Relief Act of 1942

The Right to Financial Privacy Act of 1978

For further information, on the above acts see How to Get Credit.

Federal laws that govern your creditors' ability to collect money on the debt include the following:

The Fair Debt Collection Practices Act of 1978

The Federal Communications Act of 1934

The Bankruptcy Reform Act of 1979

The Bankruptcy Reform Act of 2005

The Wage Earner Plan

Title III of The Consumer Protection Act

For further information, on the above acts see How to Prevent Creditors From Collecting Your Money, Or Not, and How to Stop Collection Calls, or Not.

Federal laws that govern the ability of your creditors to report your credit behavior include the following:

The Right to Financial Privacy Act of 1978

The Fair Credit Reporting Act of 1971

The Consumer Credit Protection Act of 1968

For further information, on the above acts see How To Stop Creditors From Reporting Your Credit, or Not.

The information listed in these series of articles lists your responsibilities as a creditor, as well as the creditor's responsibilities. Credit is a privilege, not a right, and your past actions, defined, as "credit worthiness" will determine your ability to receive credit at a reasonable rate. Obviously, the creditor's actions will also determine your ability to receive credit. Understanding the credit laws and how to apply them to your situation is the key to determine how to receive credit, whether you are young adult just embarking on your financial journey, or a seasoned adult. Understanding credit laws will help you understand your financial responsibilities under the law.³

NOTE:

This series is designed to provide the author's opinion in regard to the subject matter covered. It is presented with the understanding that the publisher, www.associatedcontent.com, and the author are not engaged in rendering legal, or other professional service. If legal or other professional service is required, the services of a competent professional person should be sought. The author disclaims any personal liability, loss, or risk incurred as a consequence of the application, either directly or indirectly, of any advice or information presented in these series of articles. Amended legislation, new court cases, world events, and Federal Trade Commission decisions are changing the ways these laws are currently being administered. It is recommended that the debtor seek out professional advice for any up-to-date information concerning credit legislation. Care should be exercised when choosing a lawyer, financial counselor, or any credit counseling service to represent you. The debtor should always monitor attorneys', financial counselors', or any credit counseling service's activities in regards to representing the debtor's interests to creditors.

For continuation of the series, see How to Get Credit, How To Prevent Creditors From Collecting Your Money, Or Not, How to Stop Collection Calls, or Not, and How To Stop Creditors From Reporting Your Credit, or Not.

ENDNOTES:

¹ Barbara Waller, "Sept. 11 Provides Chance to Balance Life's Priorities," Journal News, Westchester, NY, Reprinted in The Arizona Republic, Editor, Tom Callinan, Phoenix Newspapers Inc. 200 E. Van Buren, Phoenix, AZ 85004, September 8, 2002, p. D-3.

² Associated Press, "Youths Should Learn About Finances, Greenspan Says," The Arizona Republic, Editor, Ward Bushee, Phoenix Newspapers Inc. 200 E. Van Buren, Phoenix, AZ 85004, April 10, 2003, p. B-3.

³ Credit Operations Manual, Jeweler's Financial Services, Zale Corporation.