f) Recognizing safeguard issues for credit application

  • View and study the following YouTube video.


These safeguards are important to know when applying for credit.

  • Equal Credit Opportunity Act (1974): Prohibits discrimination in giving credit on the basis of sex, race, color, religion, national origin, marital status, age, or receipt of public assistance.
  • Truth in Lending Act (1968): Consumers must be fully informed about the cost and conditions of borrowing.


1. Have you shopped around for the best deal?
Rates, fees, costs, etc. vary depending on the financial institution, the type of loan, your credit history, your ability to repay, etc. Call around to several financial institutions, explain what you want, and discuss interest rates, fees, options, etc., that are available.

2. Do you feel the lender pressured you to take the loan?
A loan is abusive if the lender charges more than a reasonable amount for your loan. Many times, the lender uses aggressive sales techniques to pressure the individual. A “good deal” today should be a “good deal” tomorrow.

3. Do you understand the terms of the loan?
NEVER sign any agreement that you do not understand. If you do not receive a satisfactory answer to your question, ask someone you trust to review the document and give you advice. BEFORE you agree to any loan, check it out. Talk to people you trust.

Although all creditors are required to provide the applicant with information about the loan, it is also the applicant’s responsibility to ask questions before making any commitment..

Questions to Ask When Applying for Credit

1. What is the annual fee, if any?

2. What is the annual percentage rate (APR)?

3. When are payments due?

4. What is the minimum payment required each month?

5. Is there a grace period?

6. Are there other fees associated with the credit, such as annual fees or minimum finance charges?

7. What is the credit limit?

8. What are the penalties for late or missed payments?