Equal Credit Opportunity Act
- October 6, 2016
- By: Greenpath Financial Wellness
The Equal Credit Opportunity Act prohibits credit discrimination based on:
- National origin
- Marital status
Basics of ECOA
When you apply for credit, lenders may not:
- Prevent you from applying or reject you based on who you are. They also may not use this information to decide terms of credit, like fees or interest rate.
- Ask if you’re widowed or divorced. The lender can only use the terms “married,” “unmarried,” or “separated.”
- Inquire about your marital status if you’re applying for a separate, unsecured account. You might have to provide this information if you live in a community property state.
- Ask for about your spouse, except:
- Whether your spouse is applying with you
- If your spouse will be allowed to use the account
- To determine if you rely on your spouse’s income or on alimony or child support income from a former spouse
- Question you about your plans for children. They can ask questions about expenses related to your children.
Lenders may not:
- Refuse to deem welfare the same as other income.
- Ignore income because of your sex or marital status. A lender can’t count a man’s salary at 100 percent and a woman’s at 75 percent. A lender may not assume that a woman will stop working to raise children.
- Disregard income because it comes from part-time employment, Social Security, or pensions.
- Ignore alimony or child support. A lender may ask you for proof that you receive this income steadily.
You also have the right to:
- Get credit without a cosigner if you meet their standards.
- Have a cosigner other than your spouse.
- Keep your own accounts after major life events.
- Know if your application was accepted within 30 days of applying.
- Be told why you were rejected. The lender must tell you the specific reason for the rejection. You have to ask within 60 days of rejection. A reason might be your income was too low. An improper reason might be “you didn’t meet our standards.” That isn’t specific enough.