Equal Credit Opportunity Act (ECOA)
CreditGlossary term
Definition
A federal law that prohibits lenders from discriminating against credit applicants based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. Under the ECOA, lenders must evaluate applications based on creditworthiness factors like income, debts, and credit history. If your application is denied, the lender is required to provide a specific reason for the denial.
Related terms
- Fair Credit Reporting Act (FCRA)A federal law enacted in 1970 that regulates how consumer credit information is collected, shared, and used by credit bureaus and other entities. The FCRA gives you the right to access your credit report, dispute inaccurate information, and be notified when your credit report is used against you. It also requires credit bureaus to investigate disputes within 30 days and remove information that cannot be verified.
- Predatory LendingUnfair or deceptive lending practices that impose abusive loan terms on borrowers, often targeting people with poor credit or limited financial literacy. Common signs include extremely high interest rates, hidden fees, loan flipping, and balloon payments that the borrower cannot reasonably afford. Federal and state laws, including the Truth in Lending Act, aim to protect consumers from predatory lending.
- Credit ReportA detailed record of your credit history maintained by credit bureaus, including your accounts, payment history, balances, and any public records like bankruptcies. Lenders, landlords, and sometimes employers review your credit report to assess your financial reliability. You are entitled to one free credit report per year from each of the three major bureaus through AnnualCreditReport.com.
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