The term “discrimination” has a lengthy history in America, and likely conjures up negative emotions for nearly all of us. Whether we combine discrimination with the term racial, age, or credit– this type of treatment is not only unfortunate, it is against the law.

So what information is considered lawful for a creditor to utilize when evaluating a loan or credit application? Standard allowable information includes income, monthly expenses, total debt and past credit history. A potential creditor is prohibited by law from discriminating for the following items:

• Gender, race or origin, religion, marital status
• The race of people in the neighborhood where you want to buy, refinance or improve a house with borrowed money.

• Age (except under the conditions below)
  - you are not of legal age to sign contracts (18 is typical)
  - if you are 62 or older, your age provides an advantage to your rating
  - age is a necessary factor to assess potential income changes

• Income from the following sources must be considered:
  - alimony or child support
  - public assistance programs
  - part-time employment
  - Social Security benefits
  - Pension, annuity and retirement plan income

For a detailed explanation of consumer rights in accordance with the Equal Credit Opportunity Act (ECOA), read the equal credit opportunity page on the ftc.gov website.

If you feel that your rights have been violated, you may consider taking action as follows:

• Provide a written complaint to the creditor and inform them that you are aware of your rights in accordance with the ECOA.
• Contact the state Attorney General and ask them to determine if any state laws have been violated in your case.
• Contact the FTC consumer response center or appropriate government agency and report the discrimination. If you were denied credit, the creditor is required to provide the agency contact information. A list of appropriate agencies can be found on the ftc.gov website.
• Retain an attorney and take your case to federal district court.
• In the case of a group of similar complaints, consider filing a class action suit. You may recover punitive damages for the group of up to $500,000 or one percent of the creditor’s net worth, whichever is less.

Readers, have you ever experienced any form of credit discrimination? If so, please share your story with a comment.

Related posts:

1. Lender Discrimination Protection: Know Your Rights as a Consumer You remain a consumer with rights even as you apply...
2. Ten Items You Don’t Want to Purchase Using a Credit Card We posted a blog about a year ago which announced...
3. Do You Understand What Impacts Your Credit Score? Take This Quiz! According to a recent article  in RISMEDIA, Forty-two percent of...
4. Under 21? Getting a Credit Card Will Soon be More Difficult As with many things in life and politics, the new...
5. Understanding “Inquiries” on Your Credit Report I recently ordered my annual free credit report and just...