Report: Black adults twice as likely to be denied credit
RICHMOND, Va. (WWBT) - Fifty-seven percent of Black adults were denied or approved for less than requested when it comes to credit, as compared with 24% of white adults.
That’s according to a new analysis by LendingTree of federal data from the Bureau of Labor Statistics and the 2020 Economic Policy Institute report. LendingTree brings to light a snapshot of the disparities between Black and white Americans when it comes to finances.
“The lack of access to credit was really disturbing,” said the report’s author, Matt Schulz. He is a chief credit analyst at LendingTree. He calls the report stunning because credit is so essential to building up wealth. He adds that the disparities don’t stop at access to credit.
The median income for Black households is $45,438, compared with $72,204 for white households — a difference of more than $26,766. Shulz sayings having on average an extra 30,000 is a game-changer.
“It allows people to be able to pay off their debts. It allows people to be able to invest or to put money into that emergency fund. To do things to take some of that day-to-day pressure off of their lives.”
The grand canyon size gap in net worth between Black and white America hasn’t changed much over the years.
“It’s a function of years of lower-income, years of not being able to access credit and years of living paycheck-to-paycheck on a super tight budget, where your financial margin for error is almost zero,” said Schulz.
If you are having trouble getting access to credit, Schulz says one step to consider is a secured credit card. It’s where you put a certain amount of money down - maybe $150 - and it gets you a small credit limit. You won’t get rewards but it will help you build up data points with a financial institution.
If you are not happy with the terms of your credit card, if you think your APR is too high, if you think your credit limit isn’t high enough, ask for a change. Try to negotiate a better deal. It never hurts to ask.
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