The Protections You Have Against Credit Discrimination

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Credit is used to open businesses, attend college, buy homes and automobiles for those who use credit responsibly.  Having good credit can help create opportunities to build a better future for you and your family.

It is important when looking to acquire credit that you understand credit discrimination and the protections you have against it.

The Equal Credit Opportunity Act makes it illegal for a creditor to discriminate in any aspect of a credit transaction based on certain characteristics. Also, the Fair Housing Act makes many discrimination practices in home financing illegal.

It is illegal for lenders to refuse you credit if you qualify for it, discourage you from applying for credit, offer you credit on terms that are less favorable, like a higher interest rate, than terms offered to someone with similar qualifications, and close your account on the basis of race, religion, sex, and marital status.

Warning signs include: being treated differently in person than on the phone, being discouraged from applying for credit, being refused credit if you qualify for it, and hearing a lender making negative comments about race, national origin, sex, or other protected groups.

You can protect yourself from credit discrimination by doing your research on the kind of credit product you want. Talk to your friends and family about what they use and get recommendations. Know your credit history and be sure there are no mistakes or missing items in your credit reports. You also should not be afraid to ask questions.

Understand your interest rates and fees and keep asking questions until you are satisfied that you have received complete answers. If a creditor does not want to answer your questions, this could be a sign that you shouldn’t do business with them. Keep all of these factors in mind before you sign any official paperwork.

If you have reason to believe that a lender has discriminated against you, you can file a complaint with the Consumer Financial Protection Bureau.