Protecting Your Credit Personal Finance Protecting Your Credit

Co-Signing You agree to be responsible for loan payments if the other party fails to make them They can collect from you instead of the original debtor

Truth in Lending & Consumer Leasing Acts If creditors fail to disclose information as required or gives inaccurate information, you can sue for any money loss you suffer Can also sue a creditor that doesn’t follow rules regarding credit cards

Equal Credit Opportunity Act (ECOA) If you can prove that a creditor discriminated against you for any reason prohibited by the ECOA, you can sue for actual damages plus punitive damages – payment to punish the creditor for violating the law – up to $10,000

Fair Credit Billing Act A creditor that fails to follow the rules that apply to correcting any billing errors will automatically give up the amount owed on the item in question and any finance charges on it, up to a combined total of $50 You may also sue for actual damages plus twice the amount of any finance charges

Fair Credit Reporting Act May sue any credit bureau or creditor that violates the rules regarding access to your credit records or that fails to correct errors in your credit file You’re entitled to actual damages plus any punitive damages the court allows

Consumer Credit Reporting Reform Act Places the burden of proof for accurate credit information on the credit bureau rather than on you Creditors must prove that disputed information is accurate

Are You Experiencing Two or More of These Warning Signs? Signs of Debt Problems Are You Experiencing Two or More of These Warning Signs? You make only the minimum monthly payment You struggle to make the monthly payment The total balance increases every month You miss payments or you are often late You use savings to pay for necessities You receive second or third late payment due notices You borrow money to pay off old debts You exceed credit limits You have been denied credit because of bad credit

Managing Your Debt Fair Debt Collection Practices: Debt Collectors are allowed to collect debts for creditors

Financial Counseling Consumer Credit Counseling Service: Supervise Debt Repayment Plans Aide families with serious debts Help people prevent future problems/issues Set up budgets, etc…

Bankruptcy Some or all of the assets of a debtor are distributed among creditors May include a plan to pay back creditors Severely damages your credit

Bankruptcy Act, 1978 Chapter 7: Many but not all debts are forgiven Most assets are sold to pay back creditors Protected Assets: net of home, vehicle household appliances, etc… Chapter 13: Propose a plan to eliminate debts over time Keep most of your property 5 year plan, pay all debt

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