What a strange and boring world it would be if men and women were identical, but thankfully, we differ in ways that complement each other. As a society, we’re striving to level the playing field in vital areas of life where our differences were once used to restrict women. In fact, it was just over a quarter century ago that a woman would have a hard time getting a credit card in her own name. If she were to divorce, it would have been difficult and sometimes impossible for her to secure loans or credit to start rebuilding her life. Luckily, times have changed…
The Importance of Legislation
Income plays a crucial role when it comes to lending decisions and is inseparably linked to women’s credit opportunities. The Equal Pay Act, ratified in 1963 abolished wage differentials based on sex that guaranteed equal pay for equal work for both men and women. It was followed in 1967 by affirmative action laws to increase the representation of women and minorities in areas of employment, education, and business from which they have been historically excluded. These laws were designed to protect men and women, with more recent laws designed to provide additional protections:
- Truth in Lending Act – http://www.fdic.gov/regulations/laws/rules/6500-1400.html
- Fair Credit Reporting Act – http://www.ftc.gov/os/statutes/fcra.htm
- Fair Credit Billing Act – http://www.ftc.gov/os/statutes/fcb/fcb.pdf
- Consumer Leasing Act – http://www.fdic.gov/regulations/laws/rules/6500-2000.html
- Fair Debt Collection Practices Act – http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm
Perhaps the most helpful for women regarding personal credit management was enacted in 1974. The Equal Credit Opportunity Act addressed discrimination in credit opportunities making it illegal to use gender, race, religion, marital status, age, nation of birth or prior residence and receiving public assistance to determine eligibility. Gone were the days when a man’s income needed to be included in a credit application, but it took some time for the new law to become common practice.
More and Better Opportunities
There’s no denying that the role of women has changed for the better over the years with more accessible career training and equality in education. With civil rights guaranteed, American women have the same benefits that men have enjoyed for years, including those in the area of credit and finance. With access to higher paying jobs and independence from the traditional view that a woman’s finances are directly tied to her husband’s, women can build credit histories of their own and enjoy all the benefits that come from an excellent score.
The Survey Says . . . Women Know More
Not only have women been provided with the same opportunities, but a recent survey by Experian shows that women actually know more about credit scores and have fewer delinquencies than men. The difference certainly isn’t that they handle more money because they earn 23 percent less (on average). The survey shows that women understand credit scores better than men, with knowledge about the following facts where they scored significantly higher:
- 10% – age and marital status aren’t factors in credit score calculations
- 7% – when lenders are required to disclose scores
- 6% – credit bureaus that collect the data for scores
- 5% – when scores are free
- 5% – the importance of checking credit reports
Neither group did very well when asked to define a good credit score, with only 36% of women and 29% of men giving a correct answer, but even in this area women scored quite a bit higher. One advantage that men had over women was their skepticism of credit repair agencies, with 8% more men than women recognizing their ineffectiveness.
Lesson from History
Credit opportunities available to women are the result of years of fighting and debate. The idea that the fairer sex is unable to understand this complex subject has been debunked time and again, including in Experian’s latest survey. With so many different types of financial products, women can obtain credit for their own businesses or for their families, and reliably handle the responsibility on their own. They can take out auto loans and qualify for their own mortgage, and luckily there’s nothing stopping them. Give women the credit RESPECT they deserve! You might just learn something