Keep in mind, a creditor can ask for some of the aforementioned information when you go to apply for a loan. And credit scores, so it’s clear, are primarily based on your loan payment history, credit utilization rate, credit age, mix of accounts, and amount of new credit inquiries. What can lenders consider when you apply for a loan? Factors like your income, expenses, debts, credit history and credit score are the biggies. For example, Just last week a landlord’s refusal to rent a home to a transgender woman and her wife due to their “unique relationship” constituted impermissible sex discrimination under the Fair Housing Act because such treatment punishes someone for failing to conform to gender stereotypes (see Smith v. Numerous federal courts across the country have also adopted this interpretation to provide protections to LGBTQ people under existing civil rights laws including Title VII, Title IX, and the Fair Housing Act. The Equal Employment Opportunity Commission (EEOC) has interpreted Title VII’s prohibition of sex discrimination as preventing employers from discriminating against employees on the basis of gender identity and sexual orientation. It currently prohibits lenders from discriminating against applicants based on:Īlthough the ECOA does not explicitly prohibit discrimination on the basis of sexual orientation and gender identity, LGBTQ people may still be protected under the statute’s sex discrimination protections. The ECOA applies to all creditors, whether they be an auto lender, mortgage company, bank, credit union, credit card issuer or even a retailer offering a store-branded credit card. Initially, the ECOA prohibited discrimination based on sex and marital status, but it was amended in 1976 to include race, ethnicity, age and other characteristics. It was passed back in 1974, when credit scoring was in its early stages and lending decisions were still “arguably susceptible to a loan officer’s personal judgments and prejudices,” per a 2012 paper written by Dubravka Ritter for the Federal Reserve Bank of Philadelphia. The Equal Credit Opportunity Act, or ECOA, is intended to give everyone in America a fair chance at obtaining a loan. What Is The Equal Credit Opportunity Act? The Fair Debt Collection Practices Act protects you from overly aggressive debt collectors and, while, yes, missed due dates or big debts can keep you from a loan, many personal characteristics can’t, thanks to what’s known as The Equal Credit Opportunity Act. The Fair Credit Reporting Act ensures those credit report errors get removed. But, frustrating as these things can be, there are federal laws in place meant to protect you in the credit marketplace. One misstep, and suddenly your chances for scoring an affordable loan seem a whole lot dimmer. Debt collectors sometimes call ad nauseam. Errors can just pop up on credit reports. When it comes to credit, it’s easy to feel as if the deck is stacked against you.
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