Credit applicants in the United States have specified legal rights. Do you understand the Equal Credit Opportunity Act and how it affects your ability to apply and be evaluated for credit?
We are hearing more about credit card rules, regulations and consumer concerns. Are you familiar with the Equal Credit Opportunity Act? It basically guarantees equal credit opportunities to all customers of credit card companies, banks, loan and finance companies, credit unions and retail stores. Everyone who helps you apply for credit or participates in the decision to grant credit is covered by this Act, including real estate brokers who arrange financing.
This Act ensures that all consumers are given an equal chance to apply and obtain credit. Of course, not everyone who applies for credit gets credit. The Equal Credit Opportunity Act (ECOA) affords you, the consumer, certain legal rights when dealing with lenders.
Here is what’s covered in the ECOA:
When applying for credit, creditors may not discriminate based on –
- Race
- Color
- Sex
- Religion
- National origin
- Marital Status
- Age (applicants must be of legal age to enter into a binding contract)
- Receipt of public assistance
Here’s a brief summary of some ECOA provisions:
- Generally, creditors cannot ask you about your race, sex, national origin, nor can they use these factors as a basis to grant or deny credit. When applying for a mortgage, a lender may ask you these facts as a way to enforce the laws regarding discrimination. Please note that even when applying for a mortgage, you are not required to disclose this information.
- Creditors may not discourage you from applying for credit based on race, color, religion, national origin, marital status, age or because you are receiving public assistance.
- If you are applying for unsecured credit in your own name, creditors may not ask you your marital status (married, single, widow or divorced.) A creditor though may ask you to provide this information if you live in a community property state.
- You are entitled to your own credit history, in your name even if you are married.
- Creditors may not ask you about your plans to have children.
In order to receive credit in your own name, you must have a credit history of credit in your name. Married, divorced, separated and widowed women are often hurt by not having their own individual credit history. It is to your advantage to have a record of bill paying and credit in your name too, not just your husband’s name.
You can read more about the Equal Credit Opportunity Act at this Federal Government [offsite link]: Equal Credit Opportunity: Understanding Your Rights Under The Law
Links marked with the [offsite link] designation point to websites not associated with BellaOnline.com. BellaOnline.com is not responsible for the material found there.
An educated consumer knows their legal rights. The Equal Credit Opportunity Act is in place to protect you under the law from credit discrimination based on race, color, religion, national origin, marital status, age or because you are receiving public assistance.
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