Question

A customer with an excellent credit score submits a loan application. When does the ECOA require that the applicant be advised of the status of the application?

a: Within one week
b: Within three days
c: Within 30 days
d: Within 90 days

Answer 1

The ECOA requires that a customer be advised of their loan application status within 30 days. Several reassurances can be provided to banks such as a strong credit history, collateral, and consistent employment.

Step-by-step explanation:

Under the Equal Credit Opportunity Act (ECOA), a lender must notify an applicant of the decision on their loan application within a specific timeframe. The ECOA requires that applicants be advised of the status of their application within 30 days of receiving a completed loan application. This requirement applies to all applicants, irrespective of their credit score.

Ways someone might reassure a bank regarding their ability to repay a loan include providing a strong credit history, offering collateral, securing a cosigner, showing consistent employment, presenting a solid income to debt ratio, or drafting a detailed explanation of any credit issues and how they have been or will be resolved.