Finance

The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating based on:

ACredit score

BRace, color, religion, national origin, sex, marital status, age, or receipt of public assistance✓ Correct

CDebt-to-income ratio

DEmployment history

Explanation

ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or because the applicant receives public assistance income.

People Also Study

Key Terms to Know

Debt-to-Income Ratio (DTI)

A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.

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.