Smart Money Podcast: Taking On the Racial Wealth Gap - NerdWallet
So can you describe the current disparities around credit scores and how they came to be?Kimberly Atkins Stohr: So I wanted to look at credit scoring, mostly because it's so opaque and I still don't understand exactly what that number means and what it's all about. Liz Weston: People are having their credit histories held against them when there's absolutely no reason and no proof that there's any relationship between credit and people's performance on the job. Well, there is a much bigger percentage of Black people in America who rent than who own compared to white people. Liz Weston: You also mentioned that there can be a certain pride taken in paying cash rather than using credit, and that can actually hurt people in terms of their credit scores. For most people, even people in really strained financial circumstances, the first thing that they tend to make sure they pay is their rent. Again, even though rent isn't counted positively toward a credit score, a potential landlord absolutely can look at a credit score in order to decide whether to rent to someone. We wanted to drop this in as a possible tool for people who want to build their credit and don't have a traditional credit history to fall back on.