Protecting yourself from credit discrimination --
If a lender turns you down because of something in your credit
report, you have the right to a free copy of your credit report,
thanks to the Fair Credit Reporting Act. Again, don't put this off.
Under the law, you must request your free report within 60 days
of receiving a denial notice.
If there's a mistake on your credit report, you'll want to correct
it. Bankrate's article, Correcting
errors on credit reports, will walk you through the steps.
The Equal Credit Opportunity Act also gives you the right to know
why you didn't get credit at the terms you applied for, as long
as you turn down the offer.
For example, let's say you apply for a credit card with a $2,000
limit but are offered a card with a $300 credit limit instead.
If you accept the card and start using it, your lender doesn't
need to explain why you were offered a lower credit limit. But if
you reject the offer, you have the right to find out why you didn't
get the credit deal you applied for.
If you're unhappy with a credit offer, turn it down and ask an
issuer to explain why you weren't offered a better deal. You've
got that right under the law and you might as well use it.
If your rights were violated
What should you do if you believe a lender has violated the Equal
Credit Opportunity Act in any way?
First of all, complain to the creditor and make it clear that you're
aware of your credit rights. There may have been a mix-up with your
application. A quick phone call could clear it up.
"It might just be there's a mistake or there was an error
on the application," Wilmore says.
Check with the office
of the attorney general in your state. Every state has a state
law very similar to the federal Equal Credit Opportunity Act and
you may have additional consumer protections in your state.
You also have the option of bringing a case against the creditor
in a federal district court. If you win, you can recover damages
as well as compensation for attorney fees and court costs.
Another option is to file a class action suit with other consumers
who believe that they've been discriminated against by the same
creditor. If you win, you may recover damages for the group of up
to $500,000 or 1 percent of a creditor's net worth.
For legal advice, contact a consumer attorney. To find an attorney
near you, visit the Web site of the National
Association of Consumer Advocates and search for an attorney
in your area with expertise in credit discrimination.
It's also a good idea to report violations of the Equal Credit
Opportunity Act to a federal enforcement agency. A creditor must
give you the name and address of the appropriate federal agency
to contact once you've been denied credit.
Many federal agencies don't investigate individual complaints,
but they may decide to investigate a company based on a large number
of consumer complaints.
Bankrate also provides a list
of federal enforcement agencies.