Equal Credit Opportunity Act

Understanding What Creditors Can and Cannot Do

photo of various people of multiple genders and races sitting around a table as viewed from above.  The words "equal opportunity" is written in script in the center.

The Equal Credit Opportunity Act (ECOA) ensures that all consumers are given an equal chance to obtain credit. This does not, of course, mean all consumers who apply for credit get it. Factors such as income, expenses, debt, and credit history are considerations for creditworthiness an will always be considered by any company when an application for credit is submitted.

The ECOA protects you when you deal with any creditor who regularly extends credit. This law includes 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 also 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 assistance income.

• Ask you to reveal your sex, race, national origin, or religion. Under the ECOA, a creditor may ask you to voluntarily disclose this information (except for religion) if you’re applying for a real estate loan. This information helps federal agencies enforce anti-discrimination laws. You may be asked about your residence or immigration status.

• Ask if you’re 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 you’re 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 under the ECOA.

• 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 spouse’s 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 you’re first told that you don’t have to provide this information if you won’t rely on these payments to get credit. The ECOA does allow a creditor to ask if you have to pay alimony, child support, or separate maintenance payments.

When Deciding To Give You Credit, A Creditor May Not…

• 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:

  • you are too young to sign contracts, generally younger than 18 years of 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’s 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 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.

• 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. The ECOA does allow a creditor to ask you to prove you have received this income consistently.

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