Monthly Archives: November 2012

CFPB Proposal May Help Stay-at-Home Spouses Get Their Own Credit Cards

A proposal from the CFBP or Consumer Financial Protection Bureau offers some hope for stay-at-home wives and husbands to have an easier time applying for their own credit cards. At present, banks still require stay-at-home partners or spouses to submit financial documents based on their own proof of income. However, if the new proposal successfully passes, stay-at-home partners may be able to use their working partner’s financial documents as proof of shared income. The credit card issued will, however, still be issued under the name of the stay-at-home partner.

Other essential details of the proposal include the following:• Applicants must be at least 21 years old
• Applicant must have “reasonable expectation” for accessing a third-party income

The federal agency had long been criticized for their inability to accommodate credit card applications of individuals who, in spite of their unemployed status, have nevertheless healthy financial balances. The proposal is intended to revise one of the provisions in the 2009 Credit Card Act, which specifically required companies to take into account an individual’s paying ability prior to card issuance. This was then interpreted by the Federal Reserve as a requirement that disregarded household income and only considered those with external and individual sources of income as eligible for credit card issuance.

A recent survey showed that over 16M individuals in the United States are not employed outside their homes. The proposed change will thus affect a large number of individuals and can lead to an increase in the number of credit card users if it is approved.

Meanwhile, it will not hurt for stay-at-home partners to do what they can to improve their employed partners’ credit score and overall credit history, both of which will be taken into account if the proposal indeed passes as law.
There are a number of ways in which individuals may quickly improve their current credit scores.

Get a copy of your credit card report.

You need to know what your current credit score is – and how much you need to improve. If your credit score is at least 760 then you do not have anything to worry about. If it is anything below that figure then you could benefit from a little increase in your credit score.

You can obtain a free credit report every year from the three major credit bureaus – TransUnion, Experian, and Equifax. You can also buy another copy from them if you feel much has changed since the last time you received your credit report this year. However, be aware that Experian no longer sells their credit reports to private individuals.

Prove your ability to pay with a short-term installment loan.

Credit scores improve when they see that you have a credit card with perpetually low balances or when you are able to repay your loan right away. Since you don’t have a credit card yet, your only option left is to get a short-term installment loan and pay it regularly until the end.
Loans can be tough to apply to as well, though. As such, you should carefully consider which companies to apply for because you don’t want to have too many rejections noted in your credit history. At the moment, your best chances would probably be either a credit union or a community bank.