American Association of Family and Consumer Sciences (AAFCS) Practice Test

What does the Equal Credit Opportunity Act prohibit?

1. Denying credit based on a consumer's income level

2. Denying credit based on marital status

3. Denying credit based on credit score

4. Denying credit based on employment status

The correct answer is: Denying credit based on marital status

The Equal Credit Opportunity Act (ECOA) was established to ensure fair and equitable access to credit for all individuals. One of its primary prohibitions is against discrimination based on marital status. This means that lenders cannot deny a loan application or impose different terms based solely on whether an applicant is married, single, divorced, or widowed. This aspect of the law is significant because it promotes equality and helps to eliminate biases that could affect a person's ability to obtain credit based on their personal relationship status. While the other choices involve considerations that lenders may take into account when evaluating creditworthiness, such as income level, credit score, and employment status, these factors do not fall under the specific prohibitions of the ECOA regarding discrimination. Instead, the ECOA focuses on ensuring that individuals are not treated unfairly based on certain protected characteristics, including marital status. This protection fosters a more inclusive lending environment and helps consumers of all backgrounds access credit opportunities.