What protections do I have against credit discrimination? | Consumer Financial Protection Bureau (2024)

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/ .

What protections do I have against credit discrimination? | Consumer Financial Protection Bureau (2024)


What protections do I have against credit discrimination? | Consumer Financial Protection Bureau? ›

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 is an example of credit discrimination? ›

It's when a creditor blatantly discriminates against a borrower on the basis of their protected trait like race, color, nationality, religion, and sex. For example, a loan officer tells you outright they refuse to approve your small-business loan because you're Muslim.

What do you do if you suspect credit discrimination? ›

If you believe a lender discriminated against you, you can submit a complaint with the Federal Trade Commission (FTC) or with the CFPB online or by calling 1-855-411-CFPB (2372). You can also file a complaint with your state attorney general or state consumer protection office .

What is protection against discrimination in any credit transaction? ›

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 are the three types of consumer credit discrimination? ›

There are three types of discriminatory practices outlined under recent laws by the FDIC: overt discrimination, unequal treatment and unequal impact.

Can you sue for being denied credit? ›

Consider suing the creditor in federal district court. If you win, you can recover your actual damages. The court might award you punitive damages under certain circ*mstances. You also may recover reasonable lawyers' fees and court costs.

What are my rights under the Consumer Credit Protection Act? ›

The CCPA requires that the total cost of a loan or credit product be disclosed, including how interest is calculated and any fees involved. It also prohibits discrimination when considering a loan applicant and bans misleading advertising practices.

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.

What is an example of a violation of the Fair Credit Reporting Act? ›

When your credit circ*mstances have changed, and the information in your credit report isn't updated to reflect these changes, this failure might be a violation of the FCRA. Some examples of violations include: failing to report that a debt was discharged in bankruptcy. reporting old debts as new or re-aged.

What is an example of a violation of the Equal Credit Opportunity Act? ›

Examples of Equal Credit Opportunity Act (ECOA) Enforcement

One common violation of the ECOA is charging higher rates or fees to Black, Indigenous, and People of Color (BIPOC) applicants.

What are examples of laws created to protect people from unfair credit practices? ›

The Fair Credit Reporting Act regulates credit reports. The Equal Credit Opportunity Act prevents creditors from discriminating against individuals. The Fair Debt Collection Practices Act established rules for debt collectors. The Electronic Fund Transfer Act protects consumer finances during electronic payments.

What can you do when your legal rights regarding credit have been violated? ›

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 unfair credit reporting? ›

A credit reporting agency failing to correct any errors or explain why the credit report is correct within 30 days of receiving a notice of dispute by the consumer. An entity pulls or checks your credit (“hard inquiry”) when you never authorized them to do so.

What is financial discrimination? ›

Economic discrimination is discrimination based on economic factors. These factors can include job availability, wages, the prices and/or availability of goods and services, and the amount of capital investment funding available to minorities for business.

Is it legal to discriminate based on credit score? ›

What is credit discrimination? The Equal Credit Opportunity Act makes it illegal for a creditor to discriminate in any aspect of credit transaction based on certain characteristics.

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.

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