Equal Credit Opportunity Act

by Debbie Vasen | More from this Blogger

19 Mar 2008 08:58 PM

What is the Equal Credit Opportunity Act you may ask? Well, Congress passed the Equal Credit Opportunity Act in 1974. It initially developed to protect the rights of women to receive credit. In the early 1970s before the law passed, it was almost impossible for single women to get a loan and married women had to have their husbands co-sign. This act helped make the credit playing field for men and women equal.

Later on, the coverage expanded to include all types of discrimination in relation to credit. It now protects your ability to receive credit in regards to sex, age, marital status, race, and more. Essentially the law prevents creditors from evaluating any of these when appraising you for a loan.

At times a lender, especially when applying for a mortgage, will ask you some specific questions about ethnicity. Remember your decision to answer is voluntary and the information cannot determine your eligibility.

Of course, while this law can protect you, it can't guarantee you will receive credit. There are other legal factors that creditors use to determine your funding options. Income, debts and credit scores are some of the most significant factors.

If you are ever refused a loan, this law does require the creditor to provide you an explanation of why you were turned down. The law gives them up to 30 days to respond to your request for credit. They can communicate the reasons for a rejection in written form or provide you a way to contact them for the information.

After any loan rejection, be sure to follow up and request the information as to why. You only have 60 days to request the explanation. It is important to understand what factors were holding you back so you can address them for the future.

Related Articles:

*Advice on Letters for Credit Disputes

*What to do if you Have a Mistake on your Credit Card Statement *Credit Scores and Life

Learn more about Debbie Vasen

Debbie Vasen is a published web content editor and writer, as well as a freelance writer for various print publications. In addition to blogging at Families.

View Full Profile | More from this Blogger