Credit Application Rights for Consumers

Ronald Lee Burdge

Written by  Pro

Lemon Law Attorney

Contributor Level 20

Posted over 1 year ago. 1 helpful vote



When I apply for credit, are there any laws or rules on what gets looked at and when I'm supposed to hear about my new credit card?

Yes. When a consumer applies for credit, federal laws govern how the application is to be handled and processed by the lending institution to prevent discrimination in lending practices. These federal credit protection laws exist to make sure you get fair treatment when you get credit.


What does the law say and how does it get enforced?

Basically, these laws require all businesses to give all consumers a fair and equal opportunity to get good credit and to keep your credit good. Most credit rights laws put you in charge of enforcement. That means if the law is violated you generally must handle the issue yourself or consult a local attorney for help. Most credit rights laws also say that if you win then you have the right to make the creditor pay your attorney fees.


What is legal and illegal under the law and what can they ask me about?

The Equal Credit Opportunity Act makes it illegal for someone to "credit discriminate" in a credit application. Such discrimination can be based on sex, race, marital status, religion, national origin, age, or receipt of public assistance. Creditors can ask about these things in most circumstances, but they may not use it to discriminate against you when deciding whether or not to grant you credit.


Who is covered by the law?

The Equal Credit Opportunity Act protects people who deal with companies that extend credit on a regular basis. This includes banks, finance companies, loan companies, retail charge account companies, credit card companies, and credit unions, just to name a few. All of these people have to follow and comply with the Equal Credit Opportunity Act. This law even protects businesses that are applying for credit.


Do they have to give me credit?

Not if they have a legitimate reason for the credit denial. Under the Equal Credit Opportunity Act, it is illegal for someone to deny you credit because of your race, sex, national origin, marital status, age, religion, or the fact that you receive welfare or public assistance. In fact, in considering your credit application, they are required to treat "reliable" public assistance income just the same as any other income from a job or anything else.


If my credit is turned down, do they have to tell me why?

Yes. If you are denied credit from any credit provider, then you have the right to know why they refused you credit and they have to tell you. In most cases you will get what is called an "adverse action notice" in the mail that explains it. If the "turn down" was because of something on your credit record, then you should get a copy of it and make sure that it is accurate or correct anything on your credit record that is not accurate.


What do I do if my credit was turned down because of discrimination?

Since you can enforce the law yourself, then if your credit application was denied in violation of the law, you may be entitled to compensation. You should contact a private attorney who handles credit rights cases.

Additional Resources

For more information on your Credit Rights and how to protect yourself, visit the Federal Reserve Board’s web site at or the Federal Trade Commission’s web site at You can also check out or or To get a copy of your credit record report at

Your Credit Reports and Credit Scores

Info on Credit and Loans

Stopping Bill Collector Harassment in Ohio, click here

Your Rights to Fair Credit in Ohio, click here

Get a Free Copy of Your Credit Report, click here

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