On Your Own; Your Legal Right @ Eighteen On Your Own formatted final version | Page 15

Borrowing and Credit
Sooner or later, you will want or need to borrow money for some purpose.
Your ability to borrow depends on your credit. Often, a new loan applicant
without a prior credit history or a steady job for a year or more is turned
down. Someone with established credit can “co-sign” for you, but they
become liable if you don’t pay.
Your credit history is maintained by one or more credit reporting agencies,
and most of your credit transactions, including your payment history, will
be recorded and then the information will be released to prospective
lenders when you apply for a loan. If you are on a loan or credit card with
someone else, and they default, that default, and the responsibility for it,
may go on your credit report. Those with steady income, job and living
stability and a good payment track record are more likely to receive credit.
Credit is valuable. It is not just about shopping, since the amount of credit
that you have and how you use it can affect where you live, what you can
afford and even where you work. Ours is a credit society, and because of
this, there are several things you should know about credit, your credit
rights, and how to use credit wisely.
Access to Credit
You have an equal right to credit. You cannot be denied credit because of
your race, sex, color, religion, national origin, marital status, age (unless
you’re not 18 yet), or because you may be receiving public assistance of
some kind. In addition, if you’re married, the creditor may not, as part of
the credit application process, ask about your plans to have children.
You have the right to know how much credit will cost you. Federal and
state laws require that you be informed how much credit will cost you.
You must be informed of the actual cost of credit—the “finance charge”—
and credit costs must be referred to in terms of the annual percentage
rate of interest (APR). This uniform rate will enable you to compare the
cost of credit from lender to lender. To be an informed consumer, review
the terms such as annual fees, APR, and where the credit may be used to
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