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How LGBTQ + Americans Can Overcome Barriers to Building Credit | Leisure

Andrew Pledger appeared publicly as gay in a January 2022 Instagram Live interview shortly before the start of his final semester at Bob Jones University, a South Carolina evangelical institution. In less than two weeks he was banished.

While Pleasure was in college, he attended a church that confirmed his gay identity for the first time. When he was banished, his family he met at the church offered to move him to their home. Thanks to their help, he was able to recover and earn his degree.

other LGBTQ + people In a similar situation, I’m not so lucky. In addition to the potential for family and social rejection, the LGBTQ + community is at increased risk of financial instability due to widespread discrimination in education, employment and housing.

Credit access and strong credit scores are the foundation of financial security. It’s not just about borrowing money. Credit scores can affect your ability to get a job, a car, or a place to live. Let’s take a look at why LGBTQ + people face financial difficulties and the steps to build credit and financial security.

Additional challenges to building credibility for the LGBTQ + community

A 2019 Federal Reserve survey of household economies and decision-making found that LGBTQ + adults are almost twice as likely to have low credit scores as the general population. In fact, those identified as LGBTQ + will issue an interpretation rule in 2021 that the Consumer Finance Protection Agency should consider gender identity and sexual orientation as a protected class under the Equal Credit Opportunity Act. Until then, they did not have explicit protection against credit discrimination.

“The law has only advanced so far. This job is just like a cultural change,” said Carmel Valentine, Executive Director of the Massachusetts Transgender Political Union (MTPC). increase.

Finding a safe place to live, a stable job, reliable transportation, and the ability to pay for emergencies are the keys to survival. And it becomes infinitely difficult for bad credit. On the other hand, cities that are more acceptable and have better protection of the area often tend to be more expensive. According to a 2021 study by the Williams Institute under the UCLA Act, LGBTQ + people earn an average of 89 cents for every $ 1 a heterosexual earns.

No matter how much money you make or spend, it does not directly affect your credit, but it can indirectly.your Credit use, Or what percentage of the credit limit you use accounts for 30% of your FICO credit score. If you have to use most of your credit limits each month, your credit can be severely hit.

“I think people have this misunderstanding that credit is only needed if you want to buy a car or a house. Also, credit checks are part of more intermediate actions, such as renting an apartment. We don’t necessarily understand the implications, “said Michelle Waymaier, a certified financial planner in Atlanta, Georgia, who specializes in working with the LGBTQ + community.

How to build and strengthen credit

Despite the additional challenges, there are still steps that LGBTQ + people can take to help build credibility.

Check your credit report

First, pull out a credit report so you know where you are standing.You are entitled to one free credit report each year from each of the three major credit bureaus However, keep in mind that this can be a stressful and potentially emotional process, especially if you rename it.

Theoretically, renaming doesn’t affect your credit. However, according to a 2022 joint letter from the National Consumer Law Center and several other LGBTQ + advocates, transgender and non-binary consumers will experience a sharp drop in credit scores and credit reports will be split into multiple files. , Reporting serious issues, such as deadnaming not being removed from the report. ..

Using pronouns, Luke Lennon founded Namesake, a platform that helps streamline the renaming process. He legally changed his name a few years ago, but didn’t realize his updated information was incorrect until they tried to buy a truck. Lenders couldn’t see all of Lennon’s credit history and could only offer loans to high interest rate trucks.

“I’m a white transmasculine [who is] Employed and financially stable. In that sense, I was in a very privileged situation, “says Lennon. “But for some, it can be a much more dangerous, dangerous, and truly damaging situation.”

If the information in your credit report is missing or inaccurate, or if you still see deadnaming, Contact the credit bureau as soon as.

Open credit card

Opening (and using responsibly) your credit card is one of the fastest and easiest ways. Start building creditAs long as you find one that is approved. If you have bad credit or no credit at all, consider the following options.

  • Secure credit card It works like a regular credit card, but requires a cash deposit. This reduces the risk to the issuer, making it easier to get approval and some do not require a credit check.
  • Student credit card Helps you build credit without a security deposit. These cards behave like regular unsecured cards, but usually have lower eligibility requirements.
  • Alternative credit card Use additional factors other than your credit history to make approval decisions. Depending on the card, income, employment and banking information may be taken into account.

Some issuers who use Mastercard as a payment processor allow credit cards to use preferred names, even if they are not official names. But without strong credibility, your options are very limited. Also, if the seller requests verification of your ID, the seller may need to call the issuer to verify your identity.

Pay on time

Paying your bills on time is an important factor in your credit score. If you cannot repay the full amount, please pay at least the minimum monthly payment. If you have problems with your minimum payment, please be proactive in contacting the issuer before you miss a payment. Publishers may offer the option to participate in difficult programs that can reduce the minimum payment while keeping the account up to date.

Ask the chosen family for help

Pleasure helped his father get a credit card at the age of 18 and pay it off, so he was able to start making credits early. However, even if you are dealing with relatives’ garbage, you may be able to find support from selected families.

“When you find a network, you can find the kind of social support system that your family might normally offer. [It] It doesn’t have to be biological, “says Waymire.

Here are some ways you can help your loved one take steps to build trust.

  • joint guarantor: Beginners, especially those under the age of 21, can increase the likelihood that their card will be approved by including a co-signer who agrees to pay the debt if you do not pay.
  • Allowed user accounts: Being an authorized user can benefit from the excellent credit behavior of the primary cardholder without having to apply for a new account.
  • Providing Secure Card Deposit Funds: Most secure credit cards require a deposit of at least $ 200.

An article on how LGBTQ + Americans can overcome barriers to building credit was originally published in NerdWallet.

How LGBTQ + Americans Can Overcome Barriers to Building Credit | Leisure

Source link How LGBTQ + Americans Can Overcome Barriers to Building Credit | Leisure

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