( Excerpt Courtesy - FTC: Public Reference Document )
Quick Look
- If you have never had credit, start building a
good record now.
- If you have had credit before under a different
name or a different location, make sure your
local credit bureaus have complete and accurate
information about you in a file under your
current name.
- If you were married or divorced recently and
changed your name, ask your creditors to change
your name on your accounts.
- If you have shared accounts with your husband,
creditors should be reporting information about
these accounts to credit bureaus under both
names, but check with the credit bureaus to make
sure.
Bureau of Consumer Protection
Office
of Consumer Business Education
(202) 326-3650 |
* Mrs. Becker had been using her
husband's department store charge card for several years. The
charges were billed to her husband, but she took responsibility
for paying the bills on time. Recently, she applied for her own
credit card from the store and her application was denied. The
reason? The store had no record of her bill-paying history on her
husband's account.
* Louise Martin changed her name when she got divorced. Although
she had several successful credit accounts in her married name,
her applications for credit in her maiden name were repeatedly
denied. Creditors told her: "We cannot find a record of your
credit history under the name you gave on your application
form."
* Bess Fenton, a young single woman, recently moved to the West
Coast to start a new job. She applied for her first credit card
with a national oil company, but since she had no record with the
local credit bureau, her application was denied. Her question:
"If it takes credit to get credit, how do I begin?"
You may have faced similar problems when you have applied for
credit. Each year, many women are denied credit because they
cannot show how they have used it. A good credit history is the
way most companies predict your future success using credit. The
record of your payment on credit cards, charge accounts,
installment loans, and other credit accounts is how you get a
"track record." It gives a creditor evidence that you
are a good credit risk.
Know Your Rights Under The Law
Two federal laws give you specific rights that help protect
your credit history and make it easier for you to obtain credit:
* The Equal Credit Opportunity Act (ECOA) prohibits a creditor
from discriminating against you on the basis of sex or marital
status in any aspect of a credit transaction. The ECOA also
forbids discrimination on the basis of your race, color, age,
national origin, religion, because you receive public assistance
payments, or because you exercised rights under the federal
consumer credit protection laws.
* The Fair Credit Reporting Act (FCRA) protects consumer privacy
and safeguards the accuracy of credit bureau reports.
Ask The Credit Bureau To Help
Credit bureaus gather and sell credit information about
consumers and are a principal source of information about your
credit history. Creditors usually rely on credit bureau reports
before issuing a line of credit. So it makes sense to ask your
local credit bureaus for your report. You can find them listed in
the telephone Yellow Pages under "Credit Bureaus" or
"Credit Reporting Agencies." The bureaus will report
whatever they have on file, which might include what kinds of
credit accounts you have, how punctually you pay your bills, and
whether you have ever filed for bankruptcy or were sued. The
report may include other credit references that you can use in
new credit applications to give a more complete picture of your
financial situation.
Some credit references may not appear in your file simply because
the creditor may not report the information to the credit
bureaus. Credit bureaus obtain most of their information from
those creditors who send them monthly reports. Some creditors
only report delinquent accounts; accounts with good payment
histories may go unreported. Most major national credit card
companies report their accounts to credit bureaus, but many local
creditors do not.
Fill An Empty Credit File
If creditors have failed to supply information to your credit
file, or if you have never had credit in your own name, a
"no file" report can cause your application to be
rejected.
For example, if you become separated, divorced, or widowed, or
simply want credit in your own name, a credit bureau may report
"no file" exists for you. You might have a great credit
history, but all in your husband's name. You may have the same
problem when you marry and change your name. Old accounts held in
your maiden name may not automatically be transferred to a file
listed under your married name. For all practical purposes your
credit history is lost. Therefore, it is important to check with
the credit bureau after a name change to ensure that old account
information has transferred to a file under your new name.
For your own protection you should learn how to prevent credit
history "evaporation." There are steps you can take to
fill an empty file with your past credit history or to build the
file with new information.
Kinds of Accounts
To ensure that you are protected should you become separated,
divorced, or widowed, find out now what kind of credit
accounts you have. You can either check the application(s)
or ask your creditor(s). There are two basic kinds of credit
accounts.
* An individual account. When you apply for an
individual account, only your own income, assets, and credit
history are considered by the creditor. Whether married or
single, you alone are responsible for paying off the debt on this
account. The account will appear on the individual's credit
report.
* A joint account. The income, financial assets, and
credit history of both spouses are taken into consideration for a
joint account. No matter who actually handles the household
bills, both spouses are responsible for seeing that all debts are
paid. A creditor who reports the credit history of a joint
account to credit bureaus must report it in both names (if the
account was opened after June 1, 1977).
If you are separating from or divorcing your spouse, you should
immediately cancel your joint credit card account(s). While any
account balance remains your mutual responsibility, canceling the
account(s) will prevent further use or abuse of the card(s) that,
if left unpaid, could damage both of your credit reports.
Under the ECOA, a creditor cannot automatically close or change
the terms of a joint credit card account solely because of the
death of your spouse. However, in some instances a creditor may
ask you to update your application or reapply. This can happen if
the account was initially granted based on all or part of your
spouse's income and if the creditor has reason to suspect your
income is inadequate to support the credit line.
Build Your Credit File
* If you have never had credit, start building a good record
now. A local bank or department store may approve your credit
application even if you do not meet the standards of large
creditors. But do not apply for too many accounts at one time.
Credit bureaus keep a record of each creditor who inquires about
you. Some creditors may deny your application if they think you
are trying to open too many accounts and may exceed your ability
to pay them.
* If you have had credit before under a different name or in a
different location, make sure your local credit bureau has
complete and accurate information about you in a file under your
current name. Most cities have two or three bureaus. Call each
bureau to find out if they have a file on you. They may charge a
small fee for checking your file.
* If you are married, know that you have the right to apply for a
credit account in your own name based on your own financial
qualifications.
* If you were married or divorced recently and changed your name,
ask your creditors to change your name on your accounts. Once you
verify that these accounts are in your new name, your complete
credit history should be reported correctly to the credit bureau.
Give Your Best Credit References
List your best credit accounts, open and closed, on any credit
application -- including accounts you shared with your husband or
former husband.
Also ask the creditor to consider the credit history of accounts
that are reported in your husband's or former husband's name
only. The creditor must consider this information if you can show
it reflects your ability to manage credit. For example, you may
be able to show through cancelled checks that you made payments
on an account, even though it is listed in your husband's or
former husband's name only.
Offer to assist the creditor in providing verification of your
credit references when an account history does not appear in a
credit bureau report. If you can show a credit history applied to
you, even though it was in your husband's or former husband's
name, the creditor must consider it. Be aware, however, that if
your husband's credit history on a shared account was bad, the
company will consider that credit history yours as well. If any
previous history was unfavorable but does not accurately reflect
your creditworthiness, explain this to the creditor.
Credit History For Married People
The ECOA states that when creditors report histories to credit
bureaus or to other creditors, they must report information on
accounts shared by married couples in both names. This is true
only for accounts opened after June 1, 1977. If you and
your spouse opened an account before that time, ask the
creditor to use both names.
Ask Questions If Your Application Is Denied
The ECOA gives you the right to know the specific reasons for
denial if you receive a notice that your credit application was
denied. If the denial was based on a credit report, you are
entitled to know the specific information in the credit report
that led to the denial. After you receive this information from
the creditor, you should visit or telephone the local credit
bureau to find out what information was reported. The bureau
cannot charge for disclosure if you ask to see your file within
30 days of being notified of a denial based on a credit report.
You may ask the bureau to investigate any inaccurate or
incomplete information and correct its records.
If you live in a community property state*, a creditor may
consider your husband's credit history even if you are applying
for your own account. You still should make certain that your
local credit bureau has a separate credit file in your name.
