Equal Credit Opportunity Act

The Equal Credit Opportunity Act (ECOA) is a law that is enforced by the Federal Trade Commission. Lenders may consider a wide variety of factors before extending credit to a consumer. They may use information about one’s income, debts, or credit history.

The ECOA prohibits creditors from using certain information to determine creditworthiness. Lenders cannot use information such as race, marital status, age, national origin, color, sex or religious preferences to determine whether or not credit will be extended. They may ask for information pertaining to these areas but cannot use the information to decide terms of or denial of credit.

The ECOA also disallows creditors from denying credit to people who are on public assistance. This must be treated like any other kind of income when considering credit applications.

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