Montgomery Ward & Co., Inc., agreed yesterday to pay $175,000 in civil penalties to the Federal Trade Commission to settle charges that it refused to give consumers the reasons they were refused credit.

Wards, owned by the Mobil Oil Corp., and one of the nation's largest retailers, agreed, as part of the settlement, to write to all of its customers denied credit since March 23, 1977, who asked for the reason for the denial, informing them of the FTC allegations and enclosing a pamphlet informing them of their rights.

The FTC said the civil penalty is the largest ever involving violations of the Equal Credit Opportunity Act, which the commission has the authority to enforce.

Wards, which did not admit any violation of the law in signing the agreement, also was charged with using "inaccurate and misleading generic descriptions . . ." rather than informing applicants of the reasons for adverse action.

The agreement enjoins Wards from using zip codes or any other geographic consideration in evaluating credit applications - known as creditcard redlining - but at the same time makes no allegations of any violations of law by Wards involving the use of zip codes.

Wards is also required to disclose the specific reason for refusal of credit, such as age, number of dependents or monthly rent.

In addition, the FTC agreement states, such reasons as "length of employment," or "insufficient credit file," cannot be given to Wards credit applications when that information was not actually used in reaching the adverse decision.

Under the agreement, the company will have to state its criteria for deciding upon the creditworthiness of an applicant, and how the applicant failed to meet that criteria in all future credit rejection letters.

Under the agreement, Wards has 120 days to institute the procedures outlined and send the necessary letters to consumers specified in it.