FinanceIntermediateArizona Exam

The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating in lending based on all EXCEPT:

ARace

BAge (if the applicant is of majority age)

CCredit scoreCorrect

DNational origin

Why Credit score Is Correct

Answer C: Credit score

ECOA prohibits discrimination in lending based on race, color, religion, national origin, sex, marital status, age (if of majority), and public assistance income. Credit score is a legitimate, non-discriminatory lending criterion.

Exam Tip: Finance

Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.

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Key Terms to Know

Pre-Approval

A lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.

Fair Housing Act

Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.

Steering

An illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.

Amortization

The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.