Must My Husband Sign for My Credit?
By Jill Terry
Federal law says that you, as a married or unmarried individual, are entitled to individual credit if you qualify under a bank’s credit standards.
So why is the bank asking for your husband’s signature?
It depends. The bank may be justified, but then again, it may not. It’s a good idea to know the law before you apply. Otherwise, you may be indebted in ways you didn’t intend.
When you request credit that isn’t secured by any collateral, you’re telling the bank that your income is sufficient to repay the debt. If the income you disclose is what you earn on your own, yours is the only signature required on the application and promissory note. If the income you disclose is yours and your husband’s, then your husband (depending on which state you live in) will probably need to co-sign all the documents with you. If you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), the bank may need your husband’s signature even if you are relying your own income alone to repay the loan.
If you offer collateral that is jointly owned by you and your husband (i.e., car, home, real estate), and you live in a community property state, the bank can request that you both sign the promissory note (but this varies widely from state to state). If you don’t live in a community property state, then your husband probably only needs to sign the legal document that allows the bank to access the collateral in the event that you don’t make your payments. Typically, this kind of legal document is a deed or lien; it is not the promissory note.
If you are a small business owner applying for a loan, the bank should not require your husband to sign any documents other than those that grant the bank access to the collateral. Again, community property laws vary widely on this point, so be sure to find out from your state’s banking regulator what your spouse needs to sign.
Banks will sometimes attempt to get as many signatures as possible on as many documents as possible, believing this is the only way to protect itself in the event of defaulted loan payments. This practice of obtaining excessive signatures (and taking too much collateral) is based on the banking world’s outmoded belief in an “abundance of caution,” a catch-all phrase that dates back to the days before there were banking laws and regulations.
When applying for credit, know what kind of credit you want and be informed about what’s required to obtain it. Barring any peculiar community property laws, your ability to get credit without your husband’s signature is a right protected by the Equal Credit Opportunity Act.