Addressing the Black Experience and the Impact of Credit Checks and Ratings



 People of color are often accused of being hypersensitive when it comes to “perceived discriminations” and there is little recourse when there are issues that they feel they are being specifically singled out. 

A case in point is credit checks that many Blacks feel are used against them because of their historically low scores in comparison to their White counterparts. As credit rating checks are being used more and more for housing and even employment, the question is clear as to whether there is something to this belief and, if that is the case, what can Black people who have low scores do.

First, here are some facts. According to a new report by the Woodstock Institute based on statewide scores for Illinois, over 54 percent of the population in highly African American communities had scores below 620 and only over 16 percent of those in largely White communities were below 620.

The 620 score is significant because it is the common boundary for prime credit, or a good score.  The report entitled, “Bridging the Gap: Credit Scores and Economic Opportunity in Illinois Communities of Color” further states that there are sharp disparities in credit characteristics in Illinois between the Black and White communities. 

These findings do reflect a national model that has fostered a sense of foreboding for Black people who believe the credit rating checks are the newest “profiling” strategy to keep them not only from securing affordable housing, but also from gaining employment.

According to an article in, in addition to employers checking out the Facebook and other social media accounts of prospective hires, they are also doing credit rating checks along with the criminal record searches.  Blacks are the hardest hit by these credit rating checks.

The article highlights an organization – The Lawyers Committee For Civil Rights Under Law – that is providing information about the proper uses and abuses of background checks because the impact of credits rating checks on Blacks, many of whom are already unemployed can be detrimental to them getting back on track.

Now, experts say many who have the negative credit checks often lack the economic opportunities of their counterparts to recover from the setback and repair their credit history.

The “Bridging the Gap” report identifies the key players who need to come together to address this situation and to provide support for Blacks in jeopardy of a negative credit check.  They also identify the need to improve access to economic opportunities to build good credit and repair bad credit with a better understanding of the role that credit plays and the resources to maintain it, particularly in the area of lending.  

From a community development perspective, the recommendations include having policy makers, neighborhood planners and financial institutions taking a different approach in areas where there are large pools of people with low credit scores. 

Some of the strategies outlined are: support efforts to build credit for credit-underserved populations and to use additional data to build credit.  For those with personal credit problems, credit counseling is key to the repair process. 

Budgeting and monetary controls are crucial and, like the old adage, honesty is the best policy. The current economic crisis has caused people from all ethnic backgrounds to have low credit scores, so there is more understanding.

The impact of credit rating checks on Black people is rooted in the lack of economic opportunity and negative stereotypes, but with a renewed community outreach approach and improved communications and direct involvement from lenders, the stigma attached to them can be addressed.  Cash and carry is still the best policy. If you have credit, use it wisely!

Mereday is a contributing writer for Regal Black Men’s Magazine.

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