Actions You Can Take if You Experience Credit Discrimination

Photo by bruce mars from Pexels

Mortgage application is one of several reasons why people use credit. Most people heavily rely on credit to get favorable mortgage interest rates in order to realize their American dream of homeownership. However, there could be situations that you might believe or experience that some lenders or creditors are making it hard for you to get the credit you deserve. Experiencing credit discrimination is frustrating, and everyone can be a victim, but there are actions you can take to fight back against such illegal practices.

Credit discrimination can happen to everyone

Just recently, Apple’s credit product “Apple Card” was alleged of gender discrimination after some of its users complained that they were unusually offered a higher credit limit as compared with another who even has a better credit score. Basecamp chief technology officer, David Heinmeier Hansson voiced out his frustration in a series of Twitter posts after Apple Card offered him more credit limit than his wife. Hansson claimed that his wife has a higher credit score and that they have shared assets and accounts. The Apple Card issue did not spare even Apple co-founder, Steve Wozniak. In a comment to Hansson’s Twitter post, Wozniak also said that Apple Card unusually offered him more credit limit than his wife. The issue is now being investigated by the New York Department of Financial Services.

Credit discrimination, in all aspects, is outright illegal according to the Equal Credit Opportunity Act (ECOA). It’s illegal for creditors to unfairly treat anyone in any transaction based on their race, color, religion, gender, age, disability, marital status, or because they’re receiving any public assistance.

Credit discrimination warning signs

Credit discrimination can deprive you of any opportunity you deserve to have as a citizen. The Apple Card issue could be one of the unintentional signs of credit discrimination. Such illegal practice is unfortunately hard to detect, but here are some of the hints that could raise red flags:

  • The person you spoke to on the phone treats you differently in person.
  • You get a feeling that you’re being discouraged from applying for credit.
  • The lender makes negative remarks about race, sex, national origin, or other protected groups.
  • You are refused credit even though you qualify for it.
  • You believe that you qualify for a lower credit interest rate, but you were offered credit with a high-interest rate.
  • You were not given a reason or told how to find out why you were denied credit.
  • You are offered a deal that sounds too good to be true.
  • You feel that you’re pressured to sign a document.

You can get help if you suspect credit discrimination

You can complain directly to the creditor if you suspect credit discrimination and request to reconsider your application. Another action you can take is to find out from your state Attorney General’s Office if a creditor has violated your rights as a borrower. Moreover, you may also want to seek legal counseling and figure out if you can file a case against a creditor in the federal district court.

The Consumer Financial Protection Bureau (CFPB) is one of several federal agencies that enforce the ECOA. You can submit a complaint with the CFPB if you have a problem with a financial product or service. Once you submit a complaint, the CFPB will take action and help you get a response from the creditor regarding your complaint.

Final thoughts about credit discrimination

Credit discrimination, in any kind, is illegal as it deprives you of the opportunity to use credit to buy a home for you and your family. As a consumer, there are actions you can take if you think that a creditor makes it hard for you to get the credit you deserve.