Know your rights when it comes to credit

“Fair” might not be the term you want to use to describe your credit score, but it should describe your lender’s business practices. As a qualified borrower, you deserve the opportunity to use credit for a mortgage loan.

The Fair Housing Act and Equal Credit Opportunity Act govern fair treatment regarding home financing. Those acts say that a lender can’t treat you differently than another applicant based on your race, color, sex, religion, age, national origin, marital status or because you receive public assistance. That protection from discrimination is in effect when you apply for a mortgage loan, when the lender decides whether to grant you credit, and when the lender sets the terms of your loan.

That doesn’t mean you’ll be approved for a mortgage loan or that you’ll get certain terms. If you’re a risk—if your credit score is fair instead of good or excellent—a lender can reject your application or offer you terms less attractive than would be offered to a borrower who’s less of a risk.

Your best approach as a potential borrower is to present an attractive application. Stable employment, good credit history and a manageable debt-to-income ratio go a long way toward a successful mortgage application.

If you are rejected for a mortgage loan, find out why. The lender is required to give you a specific reason for the rejection, such as the fact that you haven’t been in your job long enough. Most lenders are happy to provide this type of information to help you address the shortcomings on your application and qualify in the future.

If you suspect any discrimination, first talk to the lender. Make sure your complaint isn’t the result of an error or miscommunication. You can then contact your local fair housing office and state’s attorney general. They will help you decide on any additional steps, such as complaints to U.S. Department of Housing and Urban Development and the Federal Trade Commission.

You aren’t guaranteed a mortgage loan, but lenders are required to fairly evaluate your creditworthiness. It’s your right.