The system didn’t really kick off in the US until 1989, which I’d guess is more recent than most realize. Until then, you had a sit-down with the bank officer and explained your need. How well do you think THAT went over for black people?
When you apply for credit, the creditor has no clue about race. (Your name can be an indicator. LOL, ask this white boy about getting trashed resumes until I dropped my “black” middle name. 🙄) You’re an anonymous number, all they care about. How in the world could you conflate that with racism?
So, if anything, credit scores clearly work against racism. You could argue that they hurt poor people, and you would be somewhat correct. But lenders aren’t exactly clamoring to loan money to the destitute. In a perfect world, your credit score reflects your ability to repay the loan.
In Cuyahoga County, there are significant disparities in credit health across neighborhoods. Communities of color have the lowest median credit scores, the highest percentage of individuals with subprime credit scores, and the highest share of individuals having debt in collections. On the other hand, majority white communities have the highest median credit scores, lowest percentage of individuals with subprime credit scores, and lowest share of individuals having debt in collections. These disparities are reflected in access to mortgages, mortgage denial rates, and arguably shape access to rental housing. Relying on credit scores and credit histories to determine access to rental housing and mortgages disparately impacts communities of color and helps exacerbate existing inequalities in the region.
And further
In practice, the reliance upon credit scores in evaluating borrowers and tenants disproportionately disadvantages communities of color, perpetuating another cycle of economic and housing injustice.
Credit scores actually help minorities.
The system didn’t really kick off in the US until 1989, which I’d guess is more recent than most realize. Until then, you had a sit-down with the bank officer and explained your need. How well do you think THAT went over for black people?
When you apply for credit, the creditor has no clue about race. (Your name can be an indicator. LOL, ask this white boy about getting trashed resumes until I dropped my “black” middle name. 🙄) You’re an anonymous number, all they care about. How in the world could you conflate that with racism?
So, if anything, credit scores clearly work against racism. You could argue that they hurt poor people, and you would be somewhat correct. But lenders aren’t exactly clamoring to loan money to the destitute. In a perfect world, your credit score reflects your ability to repay the loan.
Im glad you have found success with your credit score experiance.
On the other hand, Heres a paper reflecting on a few studies showing how credit scores can poorly affect minority communities.
https://www.thehousingcenter.org/credit-inequality-undermines-access-to-fair-housing-and-opportunity/
And further