On Approved Financing

March 27, 2014

Part I: How Credit and Credit Scores Work and What You Can Do to Improve Your Credit Score

By Gatlin Groberg

Nobody carries cash anymore. We just don’t do it. Charging your purchases on credit cards instead of pulling out dollar bills for them is the social norm and has been for quite some time. However, have you ever asked yourself how that practice is affecting your credit?

To understand credit, you must first understand what it affects. For example: employers may look at an individual’s credit history to determine whether or not to offer them a job, a landlord may deny housing to an individual with negative remarks in their credit history, and bar examiners – that means you, law students – may determine eligibility to practice law based upon a person’s credit history.[1] One of the requirements for law students in applying for the bar is submitting an affidavit attesting to their character and fitness; most state bars include “financial responsibility” as a factor in determining character and fitness for bar passage.[2] Recently, the Ohio State Bar considered an applicant’s high credit card debt as a factor in denying his eligibility to practice law – the Ohio Supreme Court later affirmed the state bar’s decision.[3] There are countless stories of people being denied qualification for an apartment because of a past late payment, or denied a job because of a bankruptcy. Credit is not only an issue that affects your finances, but can cross over into every other area of a person’s life.

Understanding how credit works and using that information to maintain good credit and a high credit score can prevent the denial of housing, employment, and yes, even entrance into the legal profession. It also establishes trust and accountability to anyone viewing your credit history. This article is the first in a three part series about how credit works, the policies behind credit, and what changes to those policies are being contemplated for the future.


When a person talks about their “credit,” they’re probably either talking about their credit history or their credit score.  It’s important to understand that a person’s credit history and their credit score are entirely different concepts that interact with one another, but in other ways have little to do with each other. Under most contexts, a credit history is a personal history of the money that has been lent to an individual. A credit history shows all the different credit related accounts a person has, how long they’ve had those accounts, and how they’ve either positively or negatively used the money that has been lent to them (i.e., made payments on time, high balances, etc.).

On the other hand, a credit score is something else entirely. A credit score is a numerical risk assessment of how likely an individual is to repay the money that has been lent to them. A credit score is generated by a private company and generally ranges from 300 to 800.[4] The higher the credit score, the less potential risk to the lender. The lender may be willing to give an individual with a higher credit score a lower interest rate or a higher credit balance. Conversely, the lower the credit score, the more risk there is to the lender. The lender may give an individual with a lower credit score a higher interest rate or cap the amount of money they’ll be willing to lend.

One of the trickiest things about credit scores is that there are many different companies generating their own credit score brand.[5] That’s right; there is not a sole credit score out there. This is important to understand because the difference in two separate credit scores may be confusing until you realize that they’re generated by separate companies. In the next segment of this series, I’ll give some examples of the companies that generate credit scores; which include the three major credit reporting agencies.

Now that we know what credit and credit scores are, let’s answer how a credit score is calculated.


To determine your credit score, most scoring models look at five key factors:[6]

  1.       Payment History

A consistent record of on-time payments can help and improve your credit score. This will show lenders that you pay your bills on time. Creditors and lenders love that! In return for consistent on-time payments, creditors and lenders are more willing to lend to you than if you had any late payments show up on your credit history. For example: If a lender looks at your credit history and sees that you’ve had many late payments with a lender or lenders, they may not be willing to take the risk of lending to you because they’re not confident that you’re going to pay them back on time. This will reflect with a lower credit score as well.

  1.       Outstanding Debt/Amounts Owed

This factor typically applies to credit cards more than anything else. High balances in relation to your credit limit can lower your credit score. Aim for balances under 30% of your credit limit. The big question creditors ask when they see high balances on credit cards is: “What happens if you’re suddenly not able to pay that credit card off?” High balances = risky behavior. Avoid it if you can.

  1.       Length of Credit History

An established credit history makes you a less risky borrower. So think twice before closing old accounts. The rationale behind this factor is that an established credit history will show lenders that others have trusted you in the past. The longer the credit history, the more trust a person has established. There is a valid argument that this factor pigeon holes consumers into never cancelling a credit card; this issue will be addressed in much more detail in the second part of this three part series.

  1.       New Credit Inquiries

When a lender or business checks your credit, it causes a “hard inquiry” and a slight ding to your credit score. The rationale behind this factor is that every time a lender looks at your credit history, that hard inquiry in and of itself becomes part of your credit history. If there are many inquiries from different lenders within a small amount of time, this may show lenders that you’re reckless in applying for credit and, in turn, a risk to lend to.  Therefore, apply for new credit in moderation.

Fortunately, there is a way to look at your score without causing a hard inquiry on your credit history. When a person checks their own credit score, this is considered a “soft inquiry.” Since the score is not inquired into by a third party for lending purposes, it will not even show up on your credit history. There are many different businesses a consumer can contact to see their credit score; one of them is the Fair Isaac Corporation (FICO). FICO generates the score model that most banks and lenders base credit approval off of.[7]

  1.       Types of Credit

A healthy credit history has a balanced mix of credit accounts and loans. This shows lenders you were able to handle a versatile amount of credit (i.e.; auto loans, credit cards, mortgages, boat loans, etc.). A versatile credit history may go a long way in getting the things that you want.


Below is the FICO score model that shows how the different credit scoring factors affect your credit score. You can see payment history affects your score the most. That means on-time payments are the most important factor affecting your score.

How a FICO Score breaks down:

FICO chart[8]

Knowing the percentage each factor contributes to your overall credit score can greatly impact how you use your credit and which area of your credit you may want to concentrate on.

Part II: The Three Major Credit Reporting Agencies and Negative Items

In part two of this three part series, I’ll go into an analysis of the three major credit reporting agencies, statistics on how long negative items in your credit history can be reported, and the difficulty in getting mistakenly reported items off of your credit.

Keep reading the blog; we’ll see you again shortly!


[1] Lea Shepard, Toward A Stronger Financial History Antidiscrimination Norm, 53 B.C. L. Rev 1695, 1696 (2012).

[2] Comprehensive Guide to Bar Admission Requirements 2014 vii (Erica Moeser & Claire Huismann eds., 2014), available at https://www.ncbex.org/assets/media_files/Comp-Guide/CompGuide.pdf (Relevant conduct . . . [the] neglect of financial responsibilities).

[3] In re Griffin, 943 N.E.2d 1008 (Ohio 2011) (Applicant had $16,500 of credit card debt in addition to student loans).

[4] Fair Isaac Corporation http://www.myfico.com/CreditEducation/CreditScores.aspx (last visited March 17, 2014) (FICO credit scores range from 350-800).

[5] Elkins v. Ocwen Fed. Sav. Bank Experian Info. Solutions, Inc., 2007 U.S. Dist. LEXIS 84556, 58 (N.D. Ill. Nov. 13, 2007) (“The lending industry has many different types of credit scores on the market today. Many different vendors have created them, such as Fair Isaac, the three national repositories, credit grantors, and insurance companies.”)

[6] TransUnion, http://www.transunion.com/personal-credit/credit-reports/how-credit-scoring-works.page (last visited Feb. 26, 2014) (TransUnion is one of the largest credit reporting agencies in America and one of the primary sources banks and lenders use in assessing a person’s credit history).

[7] Fair Isaac Corporation, http://www.myfico.com/crediteducation/whatsinyourscore.aspx (last visited Feb. 26, 2014).


Sitting In to Stand Up for Racial Equality

March 19, 2014

In 1961, nine African American students from Friendship Junior College staged a sit-in in Rock Hill, SC to protest segregated lunch counters.  They chose 30 days of hard labor over paying a fine for their actions and became known as the Friendship Nine.  W.T. “Dub” Massey, a member of the Friendship Nine, spoke to the Civil Rights Clinic’s Tiffney Love about sitting in to stand up for racial equality.  Click below to listen to the latest episode of The Legal Dose.


I Am Not My Record

March 13, 2014

By Brittany Moore

Four and a half years ago former Civil Rights Clinic (“CRC”) members initiated a project called Ban The Box (“BTB”) in an attempt to persuade the City of Charlotte (“City”) to remove the question on initial employment applications asking about an applicant’s criminal history. On March 1, 2014, we accomplished that goal.[1] This blog will take you through what BTB is, the history of the BTB movement in the City, the future of Ban The Box in North Carolina, and my personal reflection on BTB and the recent outcome.

What is BTB?

BTB is a grassroots movement that began in 2004 in California by encouraging public and private employers to remove the application question that asks, “Have you ever been convicted of a crime other than minor traffic offenses.” This postpones inquiry into an applicant’s criminal history until later in the hiring process.

BTB does not propose that employers mandated by law to conduct criminal background checks for the particular position, for example police officer, remove the question from their applications nor does it propose that employers never be allowed to conduct a criminal background check.

The purpose of the BTB movement is to level out the playing field for job applicants who have a criminal history. Removing the conviction inquiry box from job applications allows the applicant to be considered objectively for a position based upon their qualifications.  As a result a person who would otherwise be qualified for a job, absent their criminal

 history, is given an opportunity to be interviewed and demonstrate to the potential employer they are both qualified and rehabilitated. Another goal removing the box achieves is removing the mental barrier experienced by those who have a criminal history when they are applying for jobs. Many people have said they feel as though their application is thrown in the trash or not considered because they have checked the box when it is being reviewed next to an applicant who does not have a criminal history, and unfortunately this may actually be the case. To date, over fifty cities and municipalities have BTB, six of these are in NC, including Charlotte, and ten states have adopted statewide BTB ordinances.[2]



LaWanna Mayfield, All Of Us Or None, MOURN, local business, and individuals with criminal histories; who took on BTB in an effort to persuade the City of Charlotte to BTB.  Research indicates there are three major issues affecting Charlotte: homelessness, recidivism, and unemployment.[3] The students reached out to the community regarding BTB and rapidly gained support. On February 27, 2013, the CRC and over one-hundred community members and representatives from local organizations and businesses, wearing the BTB red, rallied and spoke in an attempt to persuade the City Council to send BTB to the Economic and Development Committee (“Committee”) for further review—which it did by a six to four vote.[4] Organizations and businesses in attendance included Changed Choices, Pasta & Provisions, Democracy NC, Action NC, Charlotte Community Justice Coalition, and Center for Community Transitions (“CCT”), just to name a few. Unfortunately, after reaching Committee, BTB lost some momentum generated at the Council Meeting in February and did not have enough votes to get out of Committee and into the City ordinances.In 2009, the CRC clinic members were part of a coalition which included CCT, 

Disappointed at the lack of support generated for BTB in Committee, Brittany Moore, Cleat Walters II, Isaac Sturgill, and Erik Ortega (“The Group”) reconvened to strategize and find a new way to bring BTB back to the forefront of the City’s mind. On November 26, 2013, The Group and a citizen affected by the box met with Charlotte City Manger Ron Carlee, Assistant City Manager Ron Kimble, and Director of Human Resources Cheryl Brown. The Group provided statistics to Carlee, Kimble, and Brown showing that 190 of 203 persons who utilized CCT’s assistance in obtaining a job maintained that job and did not recidivate, showing a mere 6% recidivism rate compared to Mecklenburg County’s recidivism rate of 37%. The City already practices progressive non-discriminatory policies, as they currently employ persons with a criminal history, so The Group stressed that by BTB the City would be affirmatively demonstrating this to the citizens.

A citizen personally affected by the box gave some insight into the barriers faced by persons with criminal histories when applying for jobs. The box creates a mental barrier to those with criminal histories in search of a job discouraging them from applying when forced to check the box. Applicants with a criminal history are also discouraged, after applying and checking the box, when an initial interview is not extended. On March 1, 2014, the City removed the box from the City’s job application thereby removing one initial barrier in obtaining employment and encouraging those with criminal histories to actively seek employment and not recidivate.

Civil Rights Clinic Helps Ban the Box

Future of BTB

Students in the CRC are currently planning on lobbying surrounding counties to BTB in an effort to support taking BTB statewide in NC. Additionally, the CRC will be lobbying for private companies to also ban the box, following the lead of Target Corporation,[5] who enacted a BTB policy in 2013 and is the largest privately owned company to date to do so. This would significantly increase employment opportunities for those with prior convictions. Stay tuned to the CRC Blog to follow the expansion and growth of BTB.

Personal Reflection

I began working on BTB through the CRC in August 2013, a slow period in the project. After learning BTB did not have enough votes to get out of Committee, it was a little discouraging so we had to find a way to either regenerate the momentum gained in February 2013 or abandon the project. The latter was not an option because of the countless hours put into the movement so far in Charlotte and the sheer number of persons impacted by the movement. So I began working with the CCT, Erik, Isaac, and Cleat on this project and was honored to do so. Isaac and Cleat were among the initial members to begin BTB and it is humbling to watch their hard work and initial research pay off. Additionally, working with Erik at CCT and the continuous support and resources he provides to persons affected by the box is remarkable. In my short time working on this project I have become heavily invested in the outcome, progression, and future of BTB in NC and nationwide. I cannot wait to see what the future holds for the BTB movement and charge you all to become involved and be a part of something that millions can benefit from.


Rights for Transgender Students

March 5, 2014

by Tierra M. Ragland

In the past couple of months, the rights and issues of Trans* students have made it to the forefront of mainstream news and social media. Facing an issue common to many transgender youth, the highest court in Maine ruled that a transgender student would be allowed to use the bathroom in accordance with her gender identity, an issue faced by many transgender youth.  Right here in Charlotte, East Mecklenburg High School crowned the first ever transgender homecoming King. These stories address gender identity, cis-gender privilege, and the struggle of Trans* youth for equal rights, visibility, and legitimacy in mainstream society. Although these issues have made national news, many people are unaware of the inequality in treatment of Trans* students.  This issue prompted two student organizations at the Charlotte School of Law to organize a panel on Trans* student rights to promote awareness of these social justice issues and provide students with the tools to get involved.

On Tuesday, February 4th, the LGBT Legal Society and the ACLU at Charlotte Law hosted a panel on Trans* student rights.   Presenters for the event included Attorneys Kelly Durden and Sarah Demarest from the Freedom Center for Social Justice LGBTQ Law Center and Josh Burford, Assistant Director of Sexual and Gender Diversity at the University of North Carolina at Charlotte.Transgender Symbol

The purpose of the event was to educate the Charlotte School of Law community on the issues faced by the Transgender[i] community, specifically in a school setting; there were nineteen students in attendance. The event started with an interesting icebreaker wherein the students broke into smaller groups and answered a series of questions about one person in the group based on their car keys. The icebreaker addressed the problem with stereotypes and the importance of self-identity. Josh Burford’s presentation educated the audience on queer history and language. The beginning of the presentation addressed the importance of language to illustrate how, during different points in history for the purpose of identity and visibility, the LGBTQ community has adopted different words to define or redefine their sexual orientation and gender identity. Burford also addressed the tension within the community with the use of the word “queer” as a term of agency or term of negativity. He also addressed how marriage equality being the “main” issue in the LGBTQ community does not address the issue of Trans* people in an effective way.  Mr. Burford’s presentation was a great lead-in to the attorneys’ presentation on Trans* student rights within the academic setting.

Durden and Demarest educated students on the issues facing Trans* students in schools.  The following issues were addressed during the presentation: access to restrooms congruent with gender identity, legal name change, housing stability, exclusion from nondiscrimination policies, a dropout rate twice that of cis-gender students, sexual assault, and the criminalization of Trans* women. Almost all of the problems faced by the transgender community are centered on transphobia.[1]

Bathrooms are an issue for the Trans* community only when they are denied access to facilities that are not consistent with their gender identity. For example, if a student is assigned the sex of male at birth but identifies as female, she then should be allowed to use the bathrooms designated female. Denying Trans* students access to facilities can lead to fear, threats, self-harm, and violence. This problem can also be solved with gender-neutral bathrooms.

Legal Name changes are available to everyone but are exceedingly important to the Trans* community for two main reasons: safety from being outed in a classroom setting and allowing Trans* individuals to choose a name aligned with their gender identity. If a student has not taken the steps to legally change their name, many schools do not have policies to protect students from being outed or allow students to use of preferred names or pronouns. Trans* students are often not protected in schools’ non-discrimination policies because such policies lack protection for sexual orientation or gender identity.

Attorneys Kelly Durden and Sarah Demarest not only educated on Trans* student rights but also provided the audience with ways to effectively advocate for Trans* student rights.  The first step is continuing to educate ourselves by attending events similar to the Trans* student rights panel. Charlotte School of Law students as future attorneys or advocates can advocate in formal ways by working to change polices in the community to make them more Trans* inclusive.  Students can get involved by joining local social justice organizations in the school and throughout North Carolina. Last but not least, students can volunteer at Freedom Center of Social Justice LGBTQ Law Center and other professional organizations working to improve the lives of the Transgender community.

The lesson from both presentations is that the laws and policies within the education system and many other parts of societies provide no protection, inclusion, or safe space for Trans* youth.  In a world of people struggling to find themselves, to tell their own story, to be seen as legitimate, the existence of Trans* people are legitimate not because we as a society make it so, but because they say so and that is really all that matters.

[1] I hesitate to use the words “transphobia” and “homophobia” because I do not believe that “phobia” or fear of a group of people properly addresses the everyday reality of the violence, discrimination, and hatred experienced by members of the LGBTQ community.

[i] Within this blog there may have been be words unfamiliar to the reader.  The following definitions are provided for clarity:

LGBTQ: An abbreviation for “Lesbian, Gay, Bisexual, Transgender, and Queer” A term often used to be more inclusive of the diversity within the community.

Transgender: An umbrella term that encompasses people who experience and/or express their gender differently from conventional or cultural expectations. Transgender people can be any race, age or sexual orientation. Often written as “Trans*” to be inclusive of the diversity within the transgender community.

Sex: Gender marker assigned at birth.

Gender Identity & Expression: How one self-identifies and chooses to express their gender often through dress, grooming, or social interaction. This may or may not be connected to the sex assigned at birth.

Cis-Gender: When one’s gender identity and sex assigned at birth are congruent.

Gender Binary: The classification of sex and gender into two distinct, opposite and disconnected, forms of masculine and feminine.

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