Credit for Women

Forty Year Anniversary of the Equal Credit Opportunity Act

The twentieth century was a time of great change and upheaval all around the globe, much of it driven by two world wars.  For women, at least women living in the west, it was a time of progress, largely thanks to the sterling efforts of the Suffragists and Suffragettes of the early years and the influence of the Women’s Movement from the 1970s onwards. It all seems rather a long time ago now as we fast forward into the twenty first century, but working women today are still benefiting from their efforts.  My working life started in 1978 and I have witnessed some huge changes for women even in the few decades since then. 

Some of the big steps forward since 1900 include

• The right to vote
• The right to own property
• Access to contraception and the right for safe and legal abortion
• Equal pay opportunities
• Equal employment
• Access to higher education and the right to graduate from university
• Entrance to the professions

One other vital freedom for women, which is not so frequently discussed, is the right to access credit.  Let us not forget that it has not been so long since women were routinely denied their own bank accounts and cheque books, let alone the right to borrow money under their own name.  Back in the nineteenth century it was rare for a woman to build a business up from scratch, or acquire property other than by inheritance.

Times change, and it has now been forty years since the 1974 Equal Credit Opportunity Act (ECOA) came into force in the USA.  This piece of legislation was not just a question of women’s rights, but of rights for everybody regardless of colour, creed, physical disability, age or sexual orientation.  Of course, the ECOA applies to the USA only, although the UK and most of the west have similar laws in place: elsewhere in the world things work very differently. 

Although the legislation has been in place for forty years, I would argue that it usually takes a while for social attitudes to catch up with the law. I live and grew up in the UK, and I can clearly remember finding it impossible to make any major financial transactions or buy anything on credit under my own steam, in spite of the fact that I was a fully fledged married woman, with a degree and a responsible well-paid job.  As recently as last year a solar panel salesman refused to have a meeting with me unless my husband was also present!  Needless to say, the meeting did not take place, and, thankfully, our roof is still innocent of those ugly solar excrescences. 

Whilst I can now look back and laugh at some of these experiences, it is important to remember just how important it is for women to establish and cherish their financial independence.  Gone are the days when it seemed OK for stay-at-home mums and housewives to survive on allowances from their husbands, when it was OK not to earn your own salary, and it was normal to have no bank account or a joint bank account only, and it was OK to rely on your husband to organise funding for all the major financial decisions and purchases.

Even after all the social and legal changes that many have fought and died for, it is a fact of life that women still do the lion’s share of housework and childcare. Consequently women are still more likely than men to take time out from their jobs and careers, leaving gaps which can have a severe impact on their earning power and on their credit histories.  Not only that, but a woman’s credit history is often completely lost when she gets married and changes her name, a problem which may only become apparent in later years on becoming separated, divorced or widowed.

What should we do to celebrate the fortieth anniversary of the ECOA?  I enjoy a bit of retail therapy as much as the next woman, but instead of going on a spending spree with your credit card why not consider a financial health check?  This is an important thing for everyone to do from time to time, say every year or so, whatever their gender. For example, why not take time to go through all  your standing orders and direct debits, making sure that you know what they are all for?  Look at your bank account: is it still the best deal for you? Many banks offer a one-off cash incentive to switch to their account, and others have current accounts with better rates of interest than some savings accounts.

If you have made the sacrifice of putting your career on the backburner in order to look after your home and children, you still need to take responsibility for your own finances and maintain your own personal current and savings accounts. Try not to rely solely on a joint bank accounts, but if that is where much of your cash is held, make sure you keep an eye on it and that you are aware of any unusual payments or withdrawals by your partner.  Don’t neglect to maintain a CV, keep your skills up to date so that you maintain your own earning power.  Whatever your employment status and marital status, ensure that you build a good credit history for yourself, in your own name.  You never know when you may need to access credit urgently: life is full of surprises! 

A couple of practical steps you can take right now to help you establish credit are to obtain your credit report and find out what your credit score is.  You may have to pay for this, depending on where you live, but it is worth the cost as you will also receive some advice on how to improve your score.  The better your credit score, the lower will be the interest you are charged on credit cards and loans.  If you don’t already have a credit card, get one, not for a ridiculous credit-fuelled spending spree, but to build a positive credit history by demonstrating to lenders that you can handle a card responsibly.

Footnote: Some Important Milestones in Female Emancipation

1792        Mary Wollstonecraft's Vindication of the Rights of Women 

1918        Representation of the People Act was passed, enfranchising 

                women over 30 with property

1919        Lady Astor takes her seat in Parliament as the first female British MP

1920        Women are allowed to graduate with degrees from Oxford University

1928        The Representation of the People Act 1928 extended the voting 

                franchise to all women over the age of 21

1946        UN Commission on the Status of Women established to secure equal
                rights for women throughout the world

1970        Equal Pay Act UK
1974        Equal Credit Opportunity Act (ECOA) in the USA        
1979        Margaret Thatcher becomes first (and so far, only!) Prime Minister of
                Great Britain
1994        First women priests ordained by the Church of England
2010        Equal Opportunities Act