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Q&A: The wealth gap and providing credit for minorities

A new process for helping affordable housing providers (i.e. landlords) for low-income tenants incorporate rent reporting into their processes.

New York City: — Photo: © Digital Journal
New York City: — Photo: © Digital Journal

For those who cannot obtain credit, especially in economies with weak social security systems, life chances are restricted. This situation is even more precarious for ethnic minorities. However, some financial institutions are adapting their output to address such societal imbalances. One example is with Experian.

Digital Journal caught up with Dara Duguay, CEO of Credit Builders Alliance (CBA) about the racial wealth gap in the U.S. and the importance of improving financial health. The organization was developed to bridge to the modern credit reporting system to help millions of individuals with poor or no credit participate in the mainstream financial system by building credit. CBA has recently entered into an alliance with Experian.

Digital Journal: What is the Rent Reporting Technical Assistance Center?

Dara Duguay: The Rent Reporting Technical Assistance Center was created in June as a step in helping to eradicate the racial wealth gap in the U.S. It offers the opportunity for rental payments to be reported to credit bureaus in order to build credit for low-income renters.

DJ: Why did Experian partner with the Credit Builders Alliance on this initiative?

Duguay: Experian is committed to improving financial health, and this drives everything that the company does. It is a technology and software provider and uses its innovative solutions to create more financial stability. Experian is always looking for new ways to help Americans and believes that everyone deserves access to just and affordable credit. Diversity and inclusion are also key pillars of Experian, and the company believes that building credit should be an opportunity offered to all Americans.

DJ: How will the Center help low-income tenants and marginalized communities?

Duguay: The Center helps affordable housing providers (i.e. landlords) for low-income tenants incorporate rent reporting into their processes. Typically, renters have a lower income than homeowners and are often households of color. They also lack enough credit history to generate a credit score, which affects their ability to access credit. By adding their rent payment to their credit report, they have the opportunity to build credit simply without taking on debt. And ultimately, this will help them access loans and have more financial freedom.

DJ: Why is building credit important?

Duguay: Building credit is important to overcoming financial obstacles and also creating flexibility. It helps people make significant purchases such as cars and homes, and receive lower interest rates, which increases financial stability. Home and auto sales also contribute to economic stability for the country.

DJ: What other ways is Experian helping consumers to build their credit?

Duguay: Experian helps consumers build credit in a variety of ways. The company’s Experian Boost™ product is a free, first-of-its-kind, consumer-controlled tool that allows credit active Americans to add information, such as streaming, phone and utility payments, to their Experian credit files. This has the potential to boost FICO Scores instantly. To date, over 74 million total points have been added to credit scores through Experian Boost™.

Written By

Dr. Tim Sandle is Digital Journal's Editor-at-Large for science news. Tim specializes in science, technology, environmental, and health journalism. He is additionally a practising microbiologist; and an author. He is also interested in history, politics and current affairs.

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