How can I protect myself from credit discrimination?
Watch for warning signs
Credit discrimination is often hidden or even unintentional, which makes it hard to spot. Look for red flags, such as:
- Treated differently in person than on the phone or online
- Discouraged from applying for credit
- Encouraged or told to apply for a type of loan that has less favorable terms (for example, a higher interest rate)
- Hearing the lender making negative comments about race, national origin, age, sex (including sexual orientation or gender identity), or other protected statuses
- Refused credit even though you qualify for it based on advertised requirements
- Offered credit with a higher rate than you applied for, even though you qualify for a lower rate based on advertised requirements
Ways to prepare before taking out a loan
- Do your research. Shop around. Learn about the benefits and risks of the loan or credit card you want. Research current interest rates. Compare offers from several lenders.
- Know your credit history. Be sure there are no mistakes or missing items in your credit reports. You have the right to request one free copy of your credit reports each year, from each of the three biggest consumer credit reporting companies, by visiting AnnualCreditReport.com. When you visit the site, you may see steps to view more frequently updated reports online. This gives you a greater ability to monitor changes in your credit. If needed, you can ask whether your credit report is available in your preferred language.
- Ask questions about total costs. Look beyond the monthly payment. Be sure you understand your interest rates and the total amount of interest and fees paid over the long run. Ask about which fees and charges may be negotiable.
- Stay in control. Lenders shouldn’t make you feel rushed or unnecessarily delay action on your application. You have a right to receive information in writing -- and in most cases, that means you get timely information on the decision a lender has made about your application for credit.
- Be sure before signing. You shouldn’t ever feel pressured to sign. You should take the time to make sure the credit product and terms work for you. If needed, ask the lender whether help is available in your preferred language.
Get legal help if you believe you have been discriminated against
For legal resources listed state by state, visit lawhelp.org .
To find out about eligibility for assistance from a Legal Services program funded by the Legal Services Corporation, visit lsc.gov/what-legal-aid/find-legal-aid .
To locate your state attorney general’s office, see naag.org/find-my-ag/ .
FAQs
It is illegal to:
What are the laws against credit discrimination? ›
The Equal Credit Opportunity Act (ECOA) prohibits discrimination in any aspect of a credit transaction. It applies to any extension of credit, including extensions of credit to small businesses, corporations, partnerships, and trusts.
What federal law protects consumers from unfair discrimination in credit? ›
The Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) protect consumers by prohibiting unfair and discriminatory practices.
What are your rights if you are denied credit? ›
You have the right to get a free copy of your credit report within 60 days of being denied credit. Simply contact the credit reporting agency that provided the credit report and ask for a free report. You can also get a free credit report every 12 months.
Which of the following laws protects against discrimination in lending? ›
The federal fair lending laws—the Equal Credit Opportunity Act and the Fair Housing Act—prohibit discrimination in credit transactions, including transactions related to residential real estate.
What are my FCRA rights? ›
Consumer Rights Under the FCRA
They can request their reports at the official, government-authorized website for that purpose: AnnualCreditReport.com. Under the FCRA, consumers also have a right to: Verify the accuracy of their report when it's required for employment purposes.
What is an example of credit discrimination? ›
Discouraged from applying for credit. Encouraged or told to apply for a type of loan that has less favorable terms (for example, a higher interest rate) Hearing the lender making negative comments about race, national origin, age, sex (including sexual orientation or gender identity), or other protected statuses.
What are my rights under the Consumer Credit Protection Act? ›
► You cannot be denied credit based on your race, sex, marital status, religion, age, national origin, or receipt of public assistance. ► You have the right to have reliable public assistance considered in the same manner as other income. ► If you are denied credit, you have a legal right to know why.
What is a red flag for an Equal Credit Opportunity Act violation? ›
ECOA violations. 1. The lender changes its story after meeting a client face-to-face after telephone conversation approval. 2. There is any indication that the loan is denied based on personal status.
What are the protections under the Consumer Credit Act? ›
You have more rights with a debt regulated by the Consumer Credit Act. Things like: You must be given a default notice if you fall into arrears. They must give you time to bring your account up to date before taking further action.
If you believe a consumer reporting company, creditor, or credit counselor has violated the law, you may file a complaint with the Attorney General's Office. The Office uses complaints to learn about misconduct.
What is the Federal Equal Credit Opportunity Act? ›
This Act (Title VII of the Consumer Credit Protection Act) prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good faith exercise of any rights under the Consumer Credit Protection Act.
What is an example of a ECOA violation? ›
Sometimes, lenders knowingly or unknowingly violate the regulations set forth by the ECOA. Violations may occur in the following manner: Denying a loan application based on the borrower's protected status. Altering an applicant's interest rate, credit limit, or credit terms due to their protected status.
What federal law protects you from unfair discrimination in credit? ›
U.S. Commission on Civil Rights. Federal laws such as the Equal Credit Opportunity Act of 1974 and the Fair Housing Act of 1968, as amended, prohibit discrimination in providing credit or credit-related services.
What federal law protects against discrimination? ›
Title VII of the Civil Rights Act, as amended, protects employees and job applicants from employment discrimination based on race, color, religion, sex and national origin.
What are the three laws created to stop lending discrimination? ›
Today, three federal laws offer protection against such discrimination: The Fair Housing Act (FHA)1. The Equal Credit Opportunity Act (ECOA)2. The Community Reinvestment Act (CRA)3.
Is it legal to discriminate based on credit score? ›
The general rule in California is that an employer may not consider acquire or consider a person's credit report in making job decisions except for applicants for or employees in: managerial positions. positions with the state Department of Justice. law enforcement positions, including peace officers.
What is the Fair Credit Reporting Act law? ›
The Fair Credit Reporting Act (FCRA) , 15 U.S.C. § 1681 et seq., governs access to consumer credit report records and promotes accuracy, fairness, and the privacy of personal information assembled by Credit Reporting Agencies (CRAs).
What is the Federal Consumer Credit Protection Act? ›
The Act (Title VI of the Consumer Credit Protection Act) protects information collected by consumer reporting agencies such as credit bureaus, medical information companies and tenant screening services. Information in a consumer report cannot be provided to anyone who does not have a purpose specified in the Act.
