How LGBTQ+ Married Couples Face Challenges with Name Changes and Credit Recognition
Many people change their names for various reasons, such as marriage, divorce, or personal preference. However, for LGBTQ+ married couples, especially those who are transgender or nonbinary, changing their names can pose significant challenges in the financial and credit industry. In this blog post, I will explore some of the troubles that LGBTQ+ married couples face with name changes and recognition in the financial and credit industry, and how they differ from those faced by straight couples. I will also discuss some of the legal protections and remedies available for LGBTQ+ consumers who experience discrimination based on their sexual identity or orientation.
Why Name Changes Matter for LGBTQ+ Married Couples
For many LGBTQ+ people, changing their name is an important part of affirming their identity and expressing their authentic selves. According to a 2015 survey by the National Center for Transgender Equality (NCTE), 61% of transgender respondents reported having changed their name to match their gender identity . Moreover, 69% of same-sex couples who married after the U.S. Supreme Court legalized same-sex marriage nationwide in 2015 changed their last names .
However, changing one's name can also create difficulties in accessing and maintaining one's credit history and financial records. Unlike traditional name changes that involve only changing one's last name, changing one's first or full name can result in fragmented or missing credit files, inaccurate or outdated information, and difficulty in verifying one's identity with creditors, lenders, employers, landlords, and government agencies. These issues can negatively affect one's credit score, ability to obtain loans, insurance rates, housing opportunities, and employment prospects.
How the Credit Reporting Industry Fails to Accommodate LGBTQ+ Name Changes
The credit reporting industry consists of three nationwide credit bureaus: Equifax, Experian, and TransUnion. These bureaus collect and store information about consumers' credit history, such as payment records, outstanding debts, credit inquiries, and public records. They also generate credit reports and scores that are used by creditors and other entities to assess consumers' creditworthiness.
The credit reporting industry has been able to accommodate last name changes for reasons of marriage or divorce for decades. However, it struggles to do so for first or full name changes that are common among LGBTQ+ people. According to the NAME Coalition (Name Acknowledgement Means Everything), a coalition of LGBTQ+, consumer, and legal advocacy organizations that works to ensure that transgender and nonbinary people can update their names on all their financial and government records , some of the challenges that LGBTQ+ consumers face with their credit reports after changing their names include:
- Fragmented credit files: Sometimes a consumer's credit report splits (or "fragments") into two or more credit reports in different names after their name change. These fragmented credit files contain only a portion of the person's credit information, which can lead to a loss of positive credit history as well as a drop in the consumer's credit score.
- Empty credit files: Some consumers find that their credit report is completely empty after their name change and that they have no credit history at all.
- Inaccessible credit files: Some consumers are unable to access their credit reports entirely after their name change.
- Deadnaming: Some consumers are deadnamed (called by their former name) in their credit reports provided to employers, landlords, and underwriters.
These problems can occur because the credit bureaus rely on information provided by creditors and other data furnishers to update consumers' names on their credit files. However, not all creditors and data furnishers report name changes consistently or accurately to the credit bureaus. Moreover, some creditors and data furnishers may not accept or recognize LGBTQ+ consumers' legal name changes or may require additional documentation or verification that is burdensome or invasive.
How LGBTQ+ Married Couples Are Treated Differently from Straight Couples
LGBTQ+ married couples face more obstacles and discrimination than straight couples when it comes to changing their names and updating their credit records. For example:
- Straight couples can easily change their last names after marriage by notifying their banks and creditors of their new legal name. The credit bureaus will learn of the name change and automatically update the person's credit file. However, for LGBTQ+ couples who change their first or full names, this approach may not work. The best action they can take is to directly inform the credit bureaus after completing a legal name change and provide documentation of their new legal name . This can be more time-consuming and complicated than simply notifying one's creditors.
- Straight couples do not have to worry about being deadnamed or misgendered by their creditors or the credit bureaus. However, for LGBTQ+ couples who change their names to match their gender identity or expression, this can be a common and distressing experience. Deadnaming or misgendering can cause emotional harm as well as confusion and mistrust among potential creditors or employers who may question the consumer's identity or credibility.
- Straight couples do not have to fear being discriminated against or harassed by their creditors or the credit bureaus because of their sexual orientation or marital status. However,
LGBTQ+ couples may face bias, prejudice, or hostility from some creditors or data furnishers who do not respect or support their rights or choices. For instance, some creditors may deny them loans or charge them higher interest rates because of their sexual orientation or gender identity. Some data furnishers may refuse to update their records or deliberately report inaccurate information to the credit bureaus.
What Legal Protections Exist for LGBTQ+ Consumers
Fortunately, there are some legal protections and remedies available for LGBTQ+ consumers who experience discrimination based on their sexual identity or orientation in the financial and credit industry. Some of these include:
- The Equal Credit Opportunity Act (ECOA): This federal law prohibits discrimination in any aspect of a credit transaction on the basis of sex, among other protected characteristics. In 2016, the Consumer Financial Protection Bureau (CFPB), a federal agency that enforces consumer protection laws, issued an official interpretation that ECOA's sex discrimination ban encompasses sexual orientation and gender identity . This means that creditors cannot deny LGBTQ+ consumers access to credit or treat them less favorably than other consumers because of their sexual orientation or gender identity.
- The Fair Credit Reporting Act (FCRA): This federal law regulates how consumer reporting agencies (such as the credit bureaus) collect and use consumer information. It also gives consumers certain rights regarding their credit reports, such as the right to access them for free once a year , dispute any inaccurate information , and place fraud alerts or security freezes on them . If a consumer reporting agency violates FCRA , consumers can sue them for damages .
- The Bostock v. Clayton County case: This landmark Supreme Court case from 2020 held that Title VII of the Civil Rights Act of 1964 , which prohibits employment discrimination on the basis of sex , also covers sexual orientation and gender identity . Although this case was about employment discrimination , it has implications for other areas of law that prohibit sex discrimination , such as ECOA . It also sets a precedent for recognizing LGBTQ+ rights under federal law .
- State and local laws: Some states and localities have enacted laws that explicitly prohibit discrimination based on sexual orientation and gender identity in various domains , including financial services . For example , California , Colorado , Illinois , New York , Oregon , Vermont , Washington , D.C., among others , have such laws . Consumers can check with their state attorney general's office or local human rights commission to find out what laws apply in their jurisdiction .
What Consumers Can Do to Protect Themselves
In addition to relying on legal protections , LGBTQ+ consumers can also take some proactive steps to protect themselves from discrimination and ensure that their name changes do not affect their credit history . Some of these steps include :
- Informing the credit bureaus directly : As mentioned earlier , the best way for LGBTQ+ consumers who change their first or full names to update their credit files is to contact the three nationwide credit bureaus ( Equifax , Experian , TransUnion ) directly after completing a legal name change . They will need to provide documentation of their new legal name , such as a court order , an updated Social Security card , or an updated driver's license or state ID . They can use the online customer support systems or call the credit bureaus directly .
- Checking one's credit reports regularly : Consumers should check their credit reports at least once a year for free at www.annualcreditreport.com . They should look for any errors , such as incorrect names , addresses , accounts , balances , inquiries , etc . They should also monitor their credit scores and activity using tools like SmartCredit .
- Disputing any errors : If consumers find any errors on their credit reports , they should dispute them with both the credit bureau that generated the report and the company that provided the information . They should explain in writing what the error is , why it is wrong , and provide any supporting documents . They can use online dispute forms or send letters by certified mail with return receipt requested . They should keep copies of all correspondence . They can also use sample letters from reputable sources like CFPB or FTC as guides .
- Seeking help if needed : If consumers encounter any problems with updating their names or disputing errors on their credit reports , they can seek help from Credlocity.