What is a credit score?
A credit score is a score—usually between 300 to 800—that determines how creditworthy a person is. Many factors go into this credit evaluation, such as payment history, amount of outstanding debt, recent credit applications, and income-to-debt ratio. A score above 700 is considered excellent, while a score below 500 is poor.
Can consumers view their credit scores?
Yes, a federal law known as the Fair and Accurate Credit Transactions Act of 2003 (FACTA) provides that consumers have free access to their credit reports and the revealing of their credit scores. Consumers can also receive their credit scores from companies, such as Experian, Trans Union, and Equifax.
What is the Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) governs credit reports and the information included on such reports. The stated purpose of the FCRA is "to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title."
In general. Upon the request of a consumer for a credit score, a consumer reporting agency shall supply to the consumer a statement indicating that the information and credit scoring model may be different than the credit score that may be used by the lender, and a notice which shall include—
(A) the current credit score of the consumer or the most recent credit score of the consumer that was previously calculated by the credit reporting agency for a purpose related to the extension of credit;
(B) the range of possible credit scores under the model used;
(C) all of the key factors that adversely affected the credit score of the consumer in the model used ...
(D) the date on which the credit score was created; and
(E) the name of the person or entity that provided the credit score or credit file upon which the credit score was created.
What is the difference between a secured and unsecured creditor?
A secured creditor is one who has a security interest in the debtor's property, while an unsecured creditor has no security interest. For example, a person might borrow $20,000 from a local bank but would need to put down something as security or collateral in exchange for the $20,000. Once the debtor pays back the $20,000 principal
LegalSpeak: What does the Equal Credit Opportunity Act (ECOA) say?
§ 701. Prohibited discrimination; reasons for adverse action.
(a) It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction—
(1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract);
(2) because all or part of the applicant's income derives from any public assistance program; or
(3) because the applicant has in good faith exercised any right under the Consumer Credit Protection Act....
loan balance and the accompanying interest, then the debtor receives back the title to his property and there is no longer an active lien on his property. Many creditors, however, are unsecured. Credit card companies are unsecured creditors. This becomes important in bankruptcy law, as secured creditors get paid before unsecured creditors.
Recently a creditor denied me credit for what I believe was because of my race or gender. Do I have any recourse?
Possibly, you may have some recourse if the creditor discriminated against you because of your race or gender under the Equal Credit Opportunity Act (ECOA), a federal law passed in 1974 to prohibit such conduct. The law prohibits creditors from discriminating on the basis of "race, color, religion, national origin, sex or marital status or age."
A creditor can deny you credit because you have a bad credit history, but not because of the aforementioned factors.