Equal Credit Opportunity Act
Obtaining credit can be a difficult process for a business owner and especially for the first time borrowers. But keep in mind that different lenders have different standards and rules, and if you do not meet the standards of one institution, you still may fit elsewhere. If you have a good understanding of why the first lender did not approve your request, with time and more attention to these details, you can improve your next loan proposal and may succeed the next time.
Women and minority group applicants may feared that they have received a less favorable treatment not related to their solvency or creditworthiness. All business candidates have protections against unlawful discrimination under the Equal Credit Opportunity Act. The law makes it illegal for lenders to deny your loan application, discourage you to apply for a loan, or give you less favorable conditions than another candidate because you are a woman or a member of a minority group.
- According to the law, a lender can not take factors such as sex, race, national origin, or marital status into account
Furthermore, the lender is not allowed to ask information about your spouse unless your spouse has a relation with the loan proposal, or if you are relying on income from your spouse to support your credit application or relying on alimony, child support, or separate maintenance payments to establish your creditworthiness. But the lender is allowed to ask you about your spouse if you are living in, or you are relying for security on property located in, a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin).
- If you are not granted the credit, be sure to discuss any questions you may have with the lender.
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