MORTGAGE SOLUTION PEOPLE
Credit is used by millions of consumers to finance an education or a
house, remodel a home, or get a small business loan.
The Equal Credit Opportunity Act (ECOA) ensures
that all consumers are given an equal chance to obtain credit. This doesnt mean all
consumers who apply for credit get it: Factors such as income, expenses, debt, and credit
history are considerations for creditworthiness.
The law protects you when you deal with any creditor who
regularly extends credit, including banks, small loan and finance companies, retail and
department stores, credit card companies, and credit unions. Anyone involved in granting
credit, such as real estate brokers who arrange financing, is covered by the law.
Businesses applying for credit also are protected by the law.
When You Apply For
Credit, A Creditor May Not...Discourage you from applying because of
your sex, marital status, age, race, national origin, or because you receive public
Ask you to reveal your sex, race, national origin, or
religion. A creditor may ask you to voluntarily disclose this information (except for
religion) if youre applying for a real estate loan. This information helps federal
agencies enforce anti-discrimination laws. You may be asked about your residence or
Ask if youre widowed or divorced. When permitted to
ask marital status, a creditor may only use the terms: married, unmarried, or separated.
Ask about your marital status if youre applying for a
separate, unsecured account. A creditor may ask you to provide this information if you
live in "community property" states: Arizona, California, Idaho, Louisiana,
Nevada, New Mexico, Texas, and Washington. A creditor in any state may ask for this
information if you apply for a joint account or one secured by property.
Request information about your spouse, except when your
spouse is applying with you; your spouse will be allowed to use the account; you are
relying on your spouses income or on alimony or child support income from a former
spouse; or if you reside in a community property state.
Inquire about your plans for having or raising children.
Ask if you receive alimony, child support, or separate
maintenance payments, unless youre first told that you dont have to
provide this information if you wont rely on these payments to get credit. A
creditor may ask if you have to pay alimony, child support, or separate maintenance
Consider your sex, marital status, race, national
origin, or religion.
Consider whether you have a telephone listing in your name.
A creditor may consider whether you have a phone.
Consider the race of people in the neighborhood where you
want to buy, refinance or improve a house with borrowed money.
Consider your age, unless:
When Deciding To Give You Credit,
A Creditor May Not...
- youre too young to sign contracts, generally younger
than 18 years of age;
- youre 62 or older, and the creditor will favor you
because of your age;
- its 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 youre about to retire;
- its used in a valid scoring system that favors
applicants age 62 and older. A credit-scoring system assigns points to answers you provide
to credit application questions. For example, your length of employment might be scored
differently depending on your age.
When Evaluating Your Income, A Creditor May Not...
- Refuse to consider public assistance income
the same way as other income.
- Discount income because of your sex or marital
status. For example, a creditor cannot count a mans salary at 100 percent and a
womans at 75 percent. A creditor may not assume a woman of childbearing age will
stop working to raise children.
- Discount or refuse to consider income because it
comes from part-time employment or pension, annuity, or retirement benefits programs.
- Refuse to consider regular alimony, child support,
or separate maintenance payments. A creditor may ask you to prove you have received this
You Also Have The Right To...
- Have credit in your birth name (Mary
Smith), your first and your spouses last name (Mary Jones), or your first name and a
combined last name (Mary Smith-Jones).
- Get credit without a cosigner, if you meet the
- Have a cosigner other than your husband or wife,
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
youre not willing or able to pay.
- Know whether your application was accepted or
rejected within 30 days of filing a complete application.
- Know why your application was rejected. The
creditor must give you a notice that tells you either the specific reasons for your
rejection or your right to learn the reasons if you ask within 60 days.
- Acceptable reasons include: "Your income was
low," or "You havent been employed long enough." Unacceptable reasons
are: "You didnt meet our minimum standards," or "You didnt
receive enough points on our credit-scoring system." Indefinite and vague reasons are
illegal, so ask the creditor to be specific.
- Find out why you were offered less favorable terms
than you applied forunless you accept the terms. Ask for details. Examples of less
favorable terms include higher finance charges or less money than you requested.
- Find out why your account was closed or why the
terms of the account were made less favorable unless the account was inactive or
A Special Note To Women
A good credit historya record of
how you paid past billsoften is necessary to get credit. Unfortunately, this hurts
many married, separated, divorced, and widowed women. There are two common reasons women
dont have credit histories in their own names: they lost their credit histories when
they married and changed their names; or creditors reported accounts shared by married
couples in the husbands name only.
If youre married, divorced,
separated, or widowed, contact your local credit bureau(s) to make sure all relevant
information is in a file under your own name.
If You Suspect Discrimination...
If a retail store,
department store, small loan and finance company, mortgage company, oil company, public
utility, state credit union, government lending program, or travel and expense credit card
company is involved, contact:
- Complain to the creditor. Make it known
youre aware of the law. The creditor may find an error or reverse the decision.
- Check with your state Attorney General to see if
the creditor violated state equal credit opportunity laws. Your state may decide to
prosecute the creditor.
- Bring a case in federal district court. If you
win, you can recover damages, including punative damages. You also can obtain compensation
for attorneys fees and court costs. An attorney can advise you on how to proceed.
- Join with others and file a class action suit. You
may recover punitive damages for the group of up to $500,000 or one percent of the
creditors net worth, whichever is less.
- Report violations to the appropriate government
agency. If youre denied credit, the creditor must give you the name and address of
the agency to contact. While some of these agencies dont resolve individual
complaints, the information you provide helps them decide which companies to investigate.
A list of agencies follows.
Consumer Response Center
Federal Trade Commission
Washington, DC 20580.
The FTC cannot intervene in individual disputes, but the information you provide may
indicate a pattern of possible law violations that require action by the Commission.
If your complaint concerns a nationally-chartered bank (National or N.A. will be part
of the name), write to:
Comptroller of the Currency
Mail Stop 7-5
Washington, DC 20219.
If your complaint concerns a state-chartered bank that is insured by the Federal
Deposit Insurance Corporation but is not a member of the Federal Reserve System, write to:
Federal Deposit Insurance Corporation
Consumer Affairs Division
Washington, DC 20429.
If your complaint concerns a federally-chartered or federally-insured savings and loan
association, write to:
Office of Thrift Supervision
Consumer Affairs Program
Washington, DC 20552.
If your complaint concerns a federally-chartered credit union, write to:
National Credit Union Administration
Consumer Affairs Division
Washington, DC 20456.
Complaints against all kinds of creditors can be referred to:
Department of Justice
Civil Rights Division
Washington, DC 20530.
This information is
provided as a public service to our visitors, for more information go to