How do you prove credit discrimination?

One way is to prove that a creditor intentionally discriminated against an applicant based on race or gender. If a credit applicant can show that a creditor treated him worse than a similarly situated person not of his race or gender, that is called disparate treatment discrimination. For example, if a creditor gives credit to a white male with a credit score of 570 but denies credit to a Latino male with a credit score of 610, that raises an inference that the creditor has engaged in disparate treatment discrimination.

There is another method of proving discrimination called disparate impact discrimination. Disparate impact refers to a facially neutral policy that works an adverse impact upon a particular group of people. For example, let's say that a creditor gives poorer credit terms across the board to all residents living within a certain zip code. Furthermore, that zip code is an area of town that is populated primarily by African-Americans. A group of African-Americans living within that zip code might have a good case of showing disparate impact discrimination. There have been many lawsuits against creditors based on poorer credit terms being extended to certain groups. However, it is difficult to prove such allegations and many of the lawsuits are dismissed without ever making it to trial.

Does the Equal Credit Opportunity Act (ECOA) prohibit credit discrimination based on sexual orientation?

No, the ECOA does not prohibit discrimination based on sexual orientation.

Can a consumer reporting agency send a credit report to prospective employers?

Yes, prospective employers can request applicants' credit reports. A section of the FCRA entitled "permissible purposes of consumer reports" provides that consumer reporting agencies can release credit reports to a person whom the agency reasonably believes "intends to use the information for employment purposes."

Can a credit report include bankruptcies, lawsuits, and arrests?

A credit report can include bankruptcy filings except that such reports may not include bankruptcies that are more than 10 years old. Credit reports also can include records of civil judgments, lawsuits, and arrest records provided they are not more than seven years old.

Do credit reports contain credit scores?

Yes, most credit reports will contain credit scores. They also will include information as to why a credit application was denied and possible reasons for why the credit score is low. For example, if you apply for a credit card or apply for a higher limit on your credit card and are denied, the credit reporting agency will send you correspondence explaining the reasons for the denial. Common reasons for the denial are too much existing debt and poor payment history.

Many people don't know this, but you can check your credit history for free once a year. It is helpful to know your credit history before applying for a loan, as well as to make sure there are no irregularities that might indicate credit or identity theft (iStock).

If a consumer disputes information on his or her credit report must that be included in the credit report?

Yes, the FCRA requires that credit reporting agencies include the fact that a consumer disputes certain information on the credit report.

If there is an error on your credit report, what do you do?

You can start by contacting one of the three major consumer reporting agencies if you determined that information in your credit report is inaccurate or incomplete. You can contact the agencies as follows:

• Equifax: 1-800-685-1111, or equifax.com

• Experian: 1-888-397-3742, or experian.com

• TransUnion: 1-800-916-8800, or transunion.com