On what basis does the Equal Credit Opportunity Act prohibit discrimination?

The Equal Credit Opportunity Act (ECOA) is designed to ensure that all individuals have an equal chance to obtain credit without facing discrimination based on specific personal characteristics. The act prohibits discrimination in any credit transaction based on factors such as race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. The intent behind this legislation is to promote fair access to credit and prevent lenders from making decisions that unjustly favor or disadvantage applicants due to their inherent traits or circumstances unrelated to their creditworthiness.

Other factors like credit scores, employment status, and amount of debt are indeed important considerations in the lending process, but they are not the basis for discrimination outlined in the ECOA. The act focuses specifically on protecting applicants from bias based on personal characteristics, ensuring that all individuals are assessed on their financial qualifications rather than their identity or background.