credit to pay for education or a house, a remodeling job or a car, or to
finance a loan to keep their business operating.
Trade Commission (FTC), the nation’s consumer protection agency, enforces the
Equal Credit Opportunity Act (ECOA), which prohibits credit discrimination on
the basis of race, color, religion, national origin, sex, marital status, age
or because you get public assistance. Creditors may ask you for most of this
information in certain situations, but they may not use it when deciding
whether to give you credit or when setting the terms of your credit.
who applies for credit gets it or gets the same terms: factors like income,
expenses, debts, and credit history are among the considerations lenders use to
determine your creditworthiness.
provides protections when you deal with any organizations or people who
regularly extend credit, including banks, small loan and finance companies,
retail and department stores, credit card companies, and credit unions.
participates in the decision to grant credit or in setting the terms of that
credit, including real estate brokers who arrange financing, must comply with
Here is a brief
summary of the basic provisions of ECOA.
When you apply
for credit, creditors may not…
from applying or reject your application because of your race, color, religion,
national origin, sex, marital status, age, or because you receive public
race, sex, or national origin, although you may be asked to disclose this
information if you want to. It helps federal agencies enforce
anti-discrimination laws. A creditor may consider your immigration status and
whether you have the right to stay in the country long enough to repay the
different terms or conditions, like a higher interest rate or higher feed, on a
loan based on your race, color, religion, national origin, sex, marital status,
age, or because you receive public assistance.
Ask if you are
widowed or divorced. A creditor may use only the terms: Married, unmarried, or
Ask about your
marital status if you are applying for a separate, unsecured account. A
creditor may ask you to provide this information if you live in a “community
property” state: Arizona, California, Idaho, Louisiana, Nevada, New Mexico,
Texas, Washington, and Wisconsin. A creditor in any state may ask for this
information if you apply for a joint account or one secured by property.
information about your spouse, except:
If your spouse
is applying with you.
If your spouse
will be allowed to use the account.
If you are
relying on your spouse’s income or on alimony or child support income from a
If you live in
a community property state.
Ask about your
plans for having or raising children. They can ask questions about expenses
related to your dependents.
Ask if you get
alimony, child support, or separate maintenance payments, unless they tell you
first that you do not have to provide this information if you are not relying
on these payments to get credit. A creditor may ask if you have to pay alimony,
child support, or separate maintenance payments.
to grant you credit or when setting the terms of credit, creditors may not…
race, color, religion, national origin, sex, marital status or whether you get
You are too
young to sign contracts, generally under 18.
You are at
least 62, and the creditor will favor you because of your age.
It is used to
determine the meaning of other factors important to creditworthiness. For
example, a creditor could use your age to determine if your income might drop
because you are about to retire.
It is used in a
valid credit scoring system that favors applicants 62 or older. A credit
scoring system assigns points to answers you give on credit applications. For
example, your length of employment might be scored differently depending on
whether you have a telephone account in your name. A creditor may consider
whether you have a phone.
racial composition of the neighborhood where you want to buy, refinance or improve
a house with money you are borrowing.
your income, creditors may not…
consider reliable public assistance income the same way as other income.
because of your sex or marital status. For example, a creditor cannot count a
man’s salary at 100 percent and a woman’s at 75 percent. A creditor may not
assume a woman of childbearing age will stop working to raise children.
refuse to consider income because it comes from part-time employment, Social
Security, pensions, or annuities.
consider reliable alimony, child support, or separate maintenance payments. A
creditor may ask you for proof that you receive this income consistently.
You also have
the right to…
Have credit in
your birth name (Mary Smith), your first and your spouse’s last name (Mary
Jones), or your first name and a combined last name (Mary Smith Jones).
without a consigner, if you meet the creditor’s standards.
Have a cosigner
other than your spouse, if one is necessary.
Keep your own
accounts after you change your name, marital status, reach a certain age, or
retire, unless the creditor has evidence that you are not willing or able to
your application was accepted or rejected within 30 days of filing a complete
Know why your
application was rejected. The creditor must tell you the specific reason for
the rejection or that you are entitled to learn the reason if you ask within 60
days. An acceptable reason might be: “your income was too low” or “you have not
been employed long enough.” An unacceptable reason might be “you did not meet
our minimum standards.” That information is not specific enough.
specific reason you were offered less favorable terms than you applied for, but
only if you reject these terms. For example, if the lender offers you a smaller
loan or a higher interest rate, and you do not accept the offer, you have the
right to know why those terms were offered.
Find out why
your account was closed or why the terms of the account were made less
favorable, unless the account was inactive or you failed to make payments as
A special note
A good credit
history – a record of your bill payments – often is necessary to get credit.
This can hurt many married, separated, divorced, and widowed women. Typically,
there are two reasons women do not have credit histories in their own names:
either they lost their credit histories when they married and changed their
names, or creditors reported accounts shared by married couples in the husband’s
If you are
married, separated, divorced, or widowed, contact your local credit reporting
agencies to make sure all relevant bill payment information is in a file under
your own name. Your credit report includes information on where you live, how
you pay your bills, and whether you have been sued, arrested or filed for
bankruptcy. National credit reporting agencies sell the information in your
report to creditors, insurers, employers, and other businesses that, in turn,
use it to evaluate your applications for credit, insurance, employment, or
renting a home.
The Fair Credit
Reporting Act (FCRA) requires each of the three nationwide credit reporting
agencies – Equifax, Experian, and TransUnion – to give you a free copy of your
credit report, at your request, once every 12 months.
To order your
report, visit annualcreditreport.com or call
If you suspect
a creditor has discriminated against you, take action
Complain to the
creditor. Sometimes you can persuade the creditor to reconsider your
the creditor in federal district court. If you win, you can recover your actual
damages and be awarded punitive damages if the court finds that the creditor’s
conduct was willful. You also may recover reasonable lawyers’ fees and court
costs. Or you might consider finding others with the same claim, and getting
together to file a class action suit. An attorney can advise you on how to
violations to the appropriate government agency. If you have been denied
credit, the creditor must give you the name and address of the agency to
A number of
state and federal agencies share enforcement responsibilities for the ECOA.
Visit the Consumer Financial Protection Bureau or
HelpWithMyBank.gov, a site maintained by the Office of the Comptroller of the
Currency, for answers to frequently-asked questions on topics like bank
accounts, deposit insurance, credit cards, consumer loans, insurance,
mortgages, identity theft, and safe deposit boxes, and for other information
about federal agencies that have responsibility for financial institutions.
about state financial institutions, check with the Wisconsin Department of
Financial Institutions at (800) 452-3328 or www.wdfi.org.