Florida Broker Practice Exam

Which of the following is NOT a basis for discrimination under the ECOA?

1. Race

2. Credit score

3. Religion

4. National origin

The correct answer is: Credit score

The Equal Credit Opportunity Act (ECOA) aims to ensure fair treatment in credit transactions and prohibits discrimination based on specific protected characteristics. Among these characteristics are race, religion, and national origin. These categories are clearly outlined as areas where discrimination is strictly prohibited in lending practices. Credit scores, however, do not fall under the categorical protections of the ECOA. Instead, credit scores are a numerical representation of an individual's creditworthiness based largely on their credit history, and lenders use them to evaluate the risk of lending to a borrower. A credit score itself may result in different treatment by a lender, but it is not considered a basis for discrimination in the same way that personal characteristics like race, religion, or national origin are. Understanding the intent of the ECOA helps clarify why credit scores are not included as a protected class. The act focuses on preventing discrimination based on inherent characteristics rather than on financial metrics or behaviors, which can vary widely among borrowers. Therefore, credit score is indeed not recognized as a discriminatory basis under the ECOA.