A Brief Overview of the Equal Credit Opportunity Act

Renell Shorter is the owner of Credit Diva of Dallas, a consulting firm that provides personal financial guidance, credit repair, and credit education. In addition, Renell "Rae" Shorter helps her clients understand their credit rights, many of which are outlined by the Equal Credit Opportunity Act (ECOA).

A United States federal law passed in 1974, the ECOA states that credit applicants may not be discriminated against based on race, religion, and marital status. Additionally, the ECOA guarantees that each individual has the right to his or her own credit profile and history. 

This law is enforced by the Federal Trade Commission, an agency that oversees many aspects of consumer safety. The ECOA is important to consumer credit rights, ensuring that all applicants are judged on identical criteria, such as credit score, credit history, income, and debt. 

While creditors cannot use these factors in making credit decisions, they are allowed to ask for their own data purposes. Additionally, some factors not allowed to be used in deciding creditworthiness, such as marital status, may still play a role in determining whether credit is granted. For example, if a married couple files a joint tax return and shares assets, the debt and income of either partner may come into play when eligibility for loans, such as a mortgage, is determined.