Credit Hurdles for Transgender, Nonbinary People Could Be Cleared Under Proposed Bill

Deadnames on credit reports can hurt people’s ability to buy or rent a house or get a job. The legislation would require credit reporting agencies to use only a person’s current name.

By Daja E. Henry
Originally published by The 19th

Proposed legislation could help clear significant credit reporting hurdles for transgender and nonbinary people. Democratic Sens. John Fetterman and Tina Smith introduced a bill Thursday requiring credit reporting agencies to use only a person’s current name in their credit reports, Fetterman’s office shared with The 19th exclusively.

The Name Accuracy in Credit Reporting Act would amend the Fair Credit Reporting Act, which regulates the way credit reporting agencies can collect, access and share consumer data. Credit reports for people who have changed their names often will either include their deadname or be created as a separate report under their changed name, which can lead to inaccuracies and trouble accessing credit.

“Amid the ongoing attacks on the LGBTQ community, I am proud to introduce this bill with Senator Smith that is a commonsense measure to make it easier for people who change their names to obtain accurate credit reports and information,” Fetterman, a Pennsylvania lawmaker, said in a statement. “Whether it’s transgender and nonbinary people or survivors of domestic violence, every American should be able to get an accurate credit report and score.”

Rep. Ayanna Pressley, a Democrat from Massachusetts, introduced the House companion earlier this year to mark Trans Day of Visibility. Proponents of the bills say these actions are long overdue.

“Updating a person’s name on their credit report should be simple, and credit bureaus have already been doing this for decades to accommodate married or divorced consumers,” Stephanie Landry, strategic lead for digital finance at Consumer Reports, said in a statement after the introduction of Pressley’s bill. “Credit Bureaus are choosing to fail transgender and nonbinary consumers by creating careless and unnecessary hurdles to accessing accurate and complete credit information—which can lead to unfair denial of credit, housing, or employment.”

Advocates said transgender and nonbinary people often face numerous issues following a name change. Some report their credit reports being fragmented into unconnected files, effectively erasing their credit history. Some said their name changes and the actions following them did not reflect on their credit reports at all. Others reported their credit scores dropping by hundreds of points. Changing a first name instead of a last name can create a problem, as credit reporting agencies often use the first name to match up information.

When a person changes their name, the burden is on them to complete additional steps to ensure the credit bureaus know of the change. The current credit reporting process can refer to previous names in an individual’s credit file. Having a different name on the file is not only an inaccuracy, but also can have implications that impact a person’s ability to buy or rent a house, get a job, or anything that would require a look into their credit history.

“I feel discriminated against as a transgender person that my information is being treated differently than other consumers. I am baffled and incensed that three major credit bureaus can not manage to provide direct, decipherable information when they require extremely sensitive and private information from consumers,” one person wrote last year in a complaint to the Consumer Financial Protection Bureau.

In an oversight hearing earlier this year, Fetterman raised the issues created for trans and nonbinary people to the heads of the three credit reporting agencies. 

“At Equifax, we’re focused on making the process when a name change needs to take place, to make that seamless and easier for that individual to complete,” said Mark Begor, CEO of Equifax. 

In an economic survey conducted by the Center for LGBTQ Economic Advancement & Research and the Movement Advancement Project, 27% of transgender respondents said they faced discrimination specifically in the context of banking or financial services. 

Last year, a coalition of 145 LGBTQ+, consumer and legal advocacy groups wrote a letter to credit bureaus urging them to address credit reporting issues that affect trans and nonbinary customers. 

“Moving slowly to enact a real fix causes profound harm to a significant number of people. Mistakes in credit reports are replicated endlessly and have resulted in cascading problems in other areas that are based on identification,” the letter said.