Educate Yourself on Credit Strategies
Know Your Credit Score
The primary factors used to calculate an individual's credit score are his or her credit payment history, time length of credit history, current debt, credit type mix and frequency of applications for new credit. Because the scoring systems are based on different criteria which are weighted differently, the three major credit bureaus in the U.S. (Equifax, TransUnion, and Experian) may issue differing scores for an individual, even though the scores are based on the same credit report information. Read more: FreeOnlineScore!
Truth In Lending
A lender must determine if its credit products require Truth in Lending disclosures and are subject to Regulation Z rules. Failure to comply could subject a lender to damages, fines or criminal liability. The Truth in Lending Act covers open-end credit, such as credit cards and home equity lines of credit. Types of closed-end credit include bank loans, installment credit, car loans and residential mortgages. There are also special regulations established for private student loans and certain mortgages, such as reverse mortgages and mortgages with above-average interest rates and costs.
Other Information
Certain types of credit aren't covered by the Truth in Lending Act. Any business, commercial or agricultural credit is exempt from the act. An amount of credit that's more than $25,000 and isn't secured by a consumer's primary residence doesn't fall under the act. The act doesn't cover credit for securities or commodities accounts that's given by broker-dealers registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission. Public utility credit, home-fuel budget plans and certain student loan programs are also exempt.