Staying Solvent

Historically, women have been excluded from the credit market, and Emily Card lays out precisely the provisions and protections of federal credit laws designed to thwart such discrimination. She illustrates thirty-five credit problems with lifelike anecdotes, in each case quoting the provision governing the situation.

Card also offers a step-by-step approach to building a credit portfolio. Beginning with a major bankcard and moving quickly to department-store cards, a credit-conscious person will keep tabs on the local credit bureau. This is to assure that credit activity is being reported correctly. These agencies store data provided by retail stores and from selected court records. They hold only limited responsibility for the information collected.

With a planned strategy, credit will increase cash flow, tax-shelter benefits, and equity growth. In the book’s last section, there is solid advice about which bills to pay in a credit crunch. For example, dentists, doctors, oil companies, and American Express rarely report to credit bureaus, so a payment delay will not affect an individual’s credit rating.

Card closes this friendly review with a few of the issues in credit access that remain unresolved. These include opening up the credit system so that consumers can choose which bureau will keep their private financial information. Changes, Card believes, must be made in credit scoring and evaluation because the present numerically based systems rest on judgments which are often biased.

Card also urges change in the effect of marital status on credit. Community-property states, for example, should automatically report credit for both spouses under both their names. Credit bureaus should be educated about the law’s provisions, which should be backed by strict regulation and enforcement. Card also points out that immediate tax write-offs for bad debts favor the creditor and push the troubled debtor into bankruptcy rather than encouraging slow repayment.