Data Point: Credit Invisible
In May 2015 a report was issued by CFPB that documents research finding that there are demographic characteristics of consumers without tradition credit reports or credit scores. The report found that the current credit system is leaving out populations that are unable to access credit and take advantage of other economic opportunities. Who are these credit invisibles you might ask…they appear to be consumers in low income neighborhoods. These populations seem to have no credit history with one of the nationwide consumer reporting agencies. Blacks and Hispanics are the ones that appear to have the disadvantage in the reporting and credit access. Whites and Asians are able to build credit more readily and thus have the advantage.
This not only affects the consumer but businesses that are unable to see an individuals potential reliability in making credit decisions but the consumer as well.