Borrower shedding a deadname? Expect failed credit checks

Rey Katz's birth name didn't match their nonbinary gender identity. Too feminine. So they started the legal process to change it. They got an over $400 name-changing court order, a new Social Security card, a new passport, and eventually a new driver's license.

Shortly after beginning the process, Katz began to fail credit checks. 

"I show up as pre-approved for some of these cards and then, for a few years at least, I couldn't get any of them," Katz said.

It happened again and again, with a travel credit card that promised a deal on expensive plane tickets, with another that promised a discounted stove. Katz finalized the name change four years ago.

"As recently as last year, I was still failing credit checks," Katz said.

And Katz isn't the only one. Credit problems after name changes are a well-documented problem within the transgender and nonbinary communities. Katz even wrote a blog post on their website The Nonbinary Connection about it, warning others they'll fail credit checks for a while.

Each of the consumer reporting agencies — Equifax, Experian, and TransUnion — deal with a name change differently.

Equifax files requests through its online myEquifax Dispute Center. After uploading documents that verify Social Security number, current address, new legal name and date of birth, Equifax says, you should file a dispute on your former legal name, which is called a deadname.

Experian's policy requires similar documents: a copy of the court order, Social Security card and a utility, bank or insurance statement with your current address. They also request date of birth, all previous addresses for the past two years and a note clarifying that it's a name change request, not a dispute over the name on a credit report.

TransUnion processed Katz's name change the quickest, but it doesn't have an online process and requires documentation sent by mail. They ask for a court order and a letter requesting the name change with an address, date of birth and Social Security number.

Experian promises to make this change in about 10 business days. The other two don't provide a timeframe online.

In February last year, the Consumer Data Industry Association, which represents the credit reporting companies, published guidance for those changing their first or middle name.

A letter in response to that by a coalition of LGBTQ+ organizations called it an encouraging start, but asked credit reporting agencies to take further steps to make the process easier. They suggest suppressing deadnames from credit reports, as this can expose people as transgender to employers or landlords, and utilizing the full 9-digit Social Security number in credit check algorithms. 

So far, only Experian actively suppresses deadnames from credit reports. TransUnion said in an emailed statement that they are introducing a similar process later this year, which will be voluntary instead of automatic.

Credit bureaus won't likely implement the second suggestion to use a full Social Security number, though. 

Eric Ellman, the senior vice president for public policy and legal affairs at CDIA, said the credit bureaus are cautious because of 2004 Federal Trade Commission guidance which stated that "matching on a full social will be worse for consumers" in the end. More digits, the guidance says, increases error, resulting in more "fragmented files" and making credit checking more expensive.

"We feel our members' matching logic is sophisticated enough," Ellman said.

But still, without direct documentation of first and middle name changes from consumers, the credit reporting companies took years to update Katz's information. 

"It was an active thought in my mind that I'm glad that I'm not trying to buy a house or even rent a new place right now, because my credit check would fail at this moment," Katz said.

The companies can, however, automatically update their information with last name changes after a person notifies their bank and creditors, the CDIA press release said. They don't require direct requests. But after first and middle name changes, which transgender and nonbinary people commonly make, the companies require the "extra step" of notifying each of them separately. 

"We've had over 50 years of experience changing last names for marriages, divorces, adoptions," Ellman said. "It's much more common."

Luca Mauer, the executive director for the office of Student Equity, Inclusion and Belonging at Ithaca College says this logic makes it seem like transgender people "popped out of the blue a couple of years ago."

"We just need to acknowledge and embrace the fact that trans and nonbinary people have existed throughout history," Mauer said. "There's a lot of ground to make up."

Mauer changed his own name before advising students on it. Back then, he said, it was difficult to find any information about the process online. He advised students to reach out to the credit reporting companies by letter.

When Katz was going through the process in 2019, credit information was still widely unavailable. TransUnion and Experian published their guidelines early last year. Equifax published theirs in March 2021.

But Experian's deadname suppression policy is a big sign of progress to Mauer. 

"That was a source of pain for many of us older folks who have established credit," he said. "So to find that information was just wonderful, and I can't wait to share it with my students."