The Equal Credit Opportunity Act states that all lenders will apply the same credit standards to all consumers, without prohibiting by race, sex, marital status, national origin, religion, age, or public assistance program involvement. This does not guarantee the approval of a loan or credit but does insure that all consumers are given an equal chance to obtain credit. The only acceptable measurement for creditors to use is your ability to pay your debts.

Many applications will contain questions about your sex, your race, or your nationality. You are not required to answer such questions on an application for credit. These may be asked in conjunction with fair housing laws or affirmative action laws, but these are completely optional. Furthermore, you should not be asked about your marital status, unless your partner will help secure and use the loan. You may be asked your age under the Equal Credit Opportunity Act, but only to determine if you are old enough to obtain credit (usually 18 years old in the U.S.)

All creditors must notify any applicants of their decision within 30 days. If the application is denied, the creditor must provide a written statement detailing the outcome or decision along with the reason for the denial and information on the applicant's rights. This act helps ensure that a certain standard is kept with all applications for credit - no matter who the applicant is.

The Fair Credit Reporting Act gives individuals the right to view their credit report. To disseminate this, each citizen can receive one free credit report every 12 months. The act allows individuals to receive their credit history for all three national credit reporting agencies. In reviewing his or her credit, disputes can be logged against specific items on the credit report, allowing the consumer to police the credit reporting agencies. If the correction to your credit is not up to par, you can also add a brief statement of 100 words or less clarifying the particular item.

The act was instituted to uphold the accuracy and privacy of an individual's information in credit reports. It was also passed with the intention of curbing identity theft, an ever-growing crime. By reviewing one's credit report each year, he or she could determine if any sort of identity theft had occurred.

Both acts help protect you by insuring the fairness of the lending industry while allowing you to take control of your credit history and ensure its accuracy. Maintaining good credit begins by learning all you can about how credit reporting works. By understanding these laws, you are taking a positive step in creating good credit for a stable financial future.