How To Protect Your Equal Credit Opportunity Rights

America’s consumer protection agency, the Federal Trade Commission (FTC) is responsible for the enforcement of the Equal Credit Opportunity Act (ECOA). This act is responsible for prohibiting credit discrimination on the grounds of color, sex, marital status, race, and so on. This information can be requested, but can’t determine applications. 

Creditworthiness and income are the only factors that should determine an application’s status. The law protects consumers against credit discrimination, therefore all creditors must abide by the ECOA. Let’s further examine what creditors can’t do when assessing applications.  

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Consumer Financial Protection Bureau (CFPB)

Applying For Credit

When applying for any type of credit, creditors aren’t permitted to reject applications or discourage you on the basis of race, color, sex, national origin, religion, marital status, age, or due to you receiving public assistance. 

Such information shouldn’t be considered in an application, although you can supply the information, as it may help federal agencies fight discrimination. Lenders also can’t implement varied terms and conditions due to race, color, religion, and so forth.

If applying for a separate or unsecured account, lenders are prohibited from asking for your marital status. Information on your spouse can only be requested for joint or secured accounts, accounts your spouse will use, or if you’re reliant on the spouse’s income. Moreover, you shouldn’t be asked if you receive alimony, child support, or similar payments.

Getting Credit And Setting The Terms

If you’re accepted for credit, creditors will need to set terms. These terms shouldn’t be influenced by race, color, national origin, religion, sex, marital status, or whether you get public assistance. 

Age shouldn’t be relevant unless you’re not old enough to sign a contract or if you’re over 62. Some lenders will offer favorable terms to those over the age of 62. Age is also only relevant if it could influence a credit score.

While a lender may take into consideration whether you own a phone, they may not judge your application according to whether the telephone account is in your name or not. Finally, they can’t use the racial composition of your neighborhood as a factor in assessing a credit application.

Assessing Your Income 

When assessing income, creditors must view consistent public assistance the same as any other type of income. Creditors can’t dismiss income due to your sex or marital status. For example, a creditor can’t consider the prospect of a woman ceasing work to raise children as a way to mark down an application. 

A creditor also must not dismiss income that comes from Social Security payments, pensions, annuities, or from part-time employment. Regular alimony must be considered, along with child support or maintenance payments. The creditor is permitted to request evidence of regular payments and with that proof must consider reliable income.

Your Rights

As a borrower, you have certain rights. First, you must have the option of taking out credit in your birth name, your first and spouse’s surname, or with your first name and a combined surname. You’re entitled to obtain credit without requiring a cosigner, should you be deemed creditworthy. If one is necessary, it doesn’t have to be your spouse. 

You reserve the right to maintain your accounts after a name change, reaching a certain age, retiring, or a change in marital status. This is only an issue should the creditor have reason to suspect you can’t make payments.

You should be informed whether a credit application was accepted or rejected within 30 days of submission. If rejected, you have a right to know the reasons why. Common reasons include low income or a lack of employment. A vague answer about not meeting standards isn’t specific enough to count as an acceptable explanation.

 If offered unfavorable terms, you again have the right to know why, but only if you turn them down. Should a creditor close an account or change to less favorable terms, you can demand to know why. Although, if the account wasn’t active or if payments were missed then you can’t demand a reason. 

Rights As A Woman

Many women are hurt by the criteria used to define creditworthiness, which ultimately affects their ability to borrow. Women may discover that their marital status affects their scores. They don’t have credit histories in their maiden name either due to a name change when marrying or because creditors often report accounts shared by couples in the husband’s name. 

If you think your report contains inaccuracies, contact the credit bureaus to ensure the correct bills are in your name and that your personal details are accurate. Each major credit bureau is required to provide a free report annually.

Bottom Line

Consumers have rights when they apply for credit, which entitles them to not be subject to discrimination due to their race, color, age, gender, and so on. If you think a creditor has discriminated against you, report them immediately. 

If you’re not satisfied with the reasons for being declined, you should complain both to your creditor and to your state Attorney General’s office. The Attorney General’s office will check if equal opportunity laws have been broken. Report transgressions to the appropriate government agency and sue creditors, if necessary. Federal agencies have a responsibility to ensure people receive a fair deal at all times.