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Fair Lending: What Creditors Cannot Ask

Under the Equal Credit Opportunity Act (ECOA), it is illegal for a creditor to discriminate against any applicant on the basis of protected characteristics. When you apply for credit, a creditor may not:

  • Ask about or consider your race, color, religion, national origin, or sex.
  • Inquire about your plans to have or raise children, or ask about your birth control practices.
  • Ask about your marital status unless you are applying for a joint account, relying on a spouse's income, or living in a "Community Property" state (AZ, CA, ID, LA, NV, NM, TX, WA, and WI).
  • Discount income because it comes from part-time work, retirement benefits, or public assistance (like Social Security).
  • Refuse to consider consistent alimony or child support payments as valid income.

Your Consumer Rights

Legally, you are entitled to fair treatment throughout the application and maintenance of your credit accounts. You have the right to:

  • Choose your name: You may have credit in your birth name, your spouse’s last name, or a combined surname.
  • Independent Accounts: You can keep your own accounts even if you change your name, marital status, or retire, provided you remain creditworthy.
  • A Non-Spouse Co-signer: If the creditor requires a co-signer, you have the right to choose someone other than your spouse.
  • The "Right to Know": If your application is denied, the lender must provide an Adverse Action Notice explaining the specific reasons (or your right to request them within 60 days).
  • Transparency: Under the Truth in Lending Act (TILA), lenders must clearly disclose the APR and total finance charges so you can accurately compare costs.

A Note on Community Property

In the nine community property states, a creditor may ask for information about your spouse even if you are applying for individual credit, as the spouse's debts or assets may legally affect your ability to repay the loan.