1. What Is “Fair Lending”?

The Equal Credit Opportunity Act ensures “Fair Lending” practices in that all consumers are given an equal chance to obtain credit. This act prohibits lenders from discriminating against applicants during the application or approval processes on the basis of race, color, religion, national origin, age, sex, marital status, public assistance, or previously exercising rights under the Consumer Credit Protection Act. This does not mean a lender is obligated to grant credit.

2. What is “Fair Credit”?

The Fair Credit Reporting Act (FCRA) was passed to promote accuracy and ensure privacy of information used in consumer credit reports. It was amended in December 2003 by the Fair and Accurate Credit Transactions (FACT) Act. One provision of the FACT Act enables consumers to request a FREE credit report from each of the three credit-reporting bureaus every 12 months, with the premise that information will be more accurate if consumers can review and correct their own reports on an annual basis. (However, the credit-reporting companies are NOT required to provide free credit scores.) For details and to request a free credit report, visit www.annualcreditreport.com.

3. What is “Fair Isaac”?

You may hear the term “Fair Isaac” related to lending but it has nothing to do with a Congressional act. It’s simply a reference to the Fair Isaac Corporation, the company founded by Bill Fair and Earl Isaac that developed the risk/behavior system used to calculate the FICO® score. For more information about FICO® credit scores, click here.

©Copyright Sharon Hassler. All rights reserved. Sharon Hassler is president of Go Get Experts, LLC, owner and operator of GoGetLoan.com, GoGetRealEstate.com, GoGetNotary.com and GoGetEscrow.com. A former loan officer and real estate agent in Southern California, she served as Communications Manager for First American Title-Arizona for 11 years. For more about Sharon, visit GoGetLoan.com/get/sharon.