Question

When making a credit decision, a lender may NOT consider:

A. The age of an applicant to verify they are old enough to enter into a contract.
B. The religion of an applicant.
C. Income from pension and other retirement benefits.
D. The age of an applicant to favor those who are age 62 or over.

Answer 1

When making a credit decision, a lender may not consider the age of an applicant to verify they are old enough to enter into a contract or the religion of an applicant. However, lenders can consider income from pension and other retirement benefits. The Equal Credit Opportunity Act prohibits lenders from using factors such as age, gender, race, and religion in making credit decisions.

Step-by-step explanation:

When making a credit decision, a lender may NOT consider the age of an applicant to verify they are old enough to enter into a contract (Option A). They also may NOT consider the religion of an applicant (Option B). However, lenders can consider income from pension and other retirement benefits (Option C) as it is a source of income for the applicant.

The Equal Credit Opportunity Act is a federal law that prohibits lenders from using factors such as age, gender, race, and religion in making credit decisions. This law ensures that credit decisions are made based on facts and not on discriminatory factors.

By not considering the age or religion of an applicant, lenders ensure that credit decisions are fair and unbiased, promoting equal opportunities for individuals seeking credit.