However, in certain situations, they might be permitted to ask this question to determine whether you’re of legal age to enter into a contract, or if a specialized financial product would favor an applicant that’s at least 62, for example. Special considerationsĪlthough the law is clear about what kind of factors can’t be used in creditors’ decisions about an application, they’re allowed to ask consumers for certain information that might be related to a protected category:Īge: Age is explicitly identified as being a category that creditors can’t discriminate against. “The ECOA also ensures that a consumer has the right to have public assistance considered in the same manner as other income,” says Huynh. This information may not be used to decide whether to approve a line of credit or set the terms for approved credit.Īdditionally, if a consumer is denied credit, they have a legal right to know why they are denied under ECOA, says Freddie Huynh, a vice president with Freedom Debt Relief. This information is voluntary and is reviewed by federal agencies to keep creditors accountable for anti-discriminatory practices. In some situations, these creditors might be permitted to ask for information like your race, sex or religion. Other entities who participate in deciding or extending credit. This law applies to a variety of creditors, including: They’re also not allowed to use protected categories as a factor when deciding whether to grant credit, and they can’t offer different terms and conditions to consumers within a protected group. Under the ECOA, creditors aren’t allowed to discourage a consumer from applying for credit because they’re in a protected group. How the Equal Credit Opportunity Act works Criteria that creditors can use in their decisions are financially based, like your income, debt, recurring expenses and credit history.Īside from forbidding creditors - and those who set the terms for credit, like real estate brokers - from using discrimination practices against protected groups, the ECOA grants consumers additional rights during the credit-seeking process. The Equal Credit Opportunity Act (ECOA) is legislation passed in 1974 that prohibits creditors from discriminating against an applicant due reasons related to race, color, religion, national origin, sex, marital status, age or participation in public assistance programs.
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