for buy propecia our drug store

Economic Power of Black Consumers Limited by Low Knowledge About Credit

By Hazel Trice Edney


predatory lenders( – Despite the level of economic destruction suffered by millions of Americans –and disparately by African-Americans – during the housing crisis, many people still have only basic knowledge of credit scoring rather than knowledge of the complexities still impacting their financial lives, according to a new survey.

“The good news is that consumers understand the basics of credit scores, such as the importance of making loan payments on time,” says Stephen Brobeck, executive director of the Consumer Federation of America (CFA), which recently released the results of its sixth annual credit score survey. “The bad news is that this knowledge is limited and, each year, can cost them hundreds of dollars in fees on services and additional interest on consumer loans,” he said in a release announcing the survey results.

Brobeck led a June 13th phone conference announcing the survey results. He said one of the most critical unknown facts about credit scores is that “low scores can add hundreds – even thousands of dollars – to your credit costs every year.”

The results are not broken down by race, but financial experts indicate this lack of knowledge has more severely impacted African-Americans and Latinos since they already suffer more economic disparities than people of other races. Financial experts at the Durham-based Center for Responsible Lending (CRL) says racial minorities are often even targeted for financial abuse; then when their credit scores plummet, their financial lives become even more difficult.

“Every day working for CRL, I’m reading information about finances. And invariably from one issue to the next, Black people – Blacks and Latinos – are getting the short end of the stick. It’s just horrible,” says CRL spokeswoman, Charlene Crowell.

Among the findings of the CFA survey of 1,005 adults in April are as follows:

Consumers greatly underestimate the cost of low credit scores. Only 22 percent know that a low score, compared to a high score, typically increases the cost of a $20,000, 60-month auto loan by more than $5,000.

A significant minority do not know that credit scores are used by non-creditors. Only about half (53 percent) know that electric utilities may use credit scores (for example, in determining the initial required deposit), while only about two-thirds know that these scores may be used by home insurers (66 percent), cell phone companies (68 percent), and landlords (70 percent).

Over two-fifths think that marital status (42 percent) and age (42 percent) are used in the calculation of credit scores. (While these factors may influence the use of credit, how credit is used determines credit scores.)

Only about half of consumers (51 percent) know when lenders are required to inform borrowers of their use of credit scores – after a mortgage application, when a consumer does not receive the best terms on a consumer loan, and whenever a consumer is turned down for a loan.

Attaining the necessary knowledge about the financial world, including about credit scoring, can be the key to a new economic beginning, experts say. Ron Busby, president/CEO of the Washington, DC-based US Black Chambers Inc. says, “The number one, two and three concerns for Black businesses is access to capital.”

Some business credit difficultly has been related to historic discrimination against Black-owned businesses. But often times when seeking to attain credit, Busby said, “I do believe we just go unprepared.”

To help prepare communities and individuals with crucial information, the CFA has a credit knowledge quiz by which current or prospective borrowers can learn how much they don’t know, but also learn new, valuable information. The 12-question quiz can be found at

Other important credit information is also readily available on line, including personal credit scores, says Barrett Burns, president/CEO of VantageScore Solutions. VantageScore is a 10-year-old credit scoring model created by the three national credit reporting companies, Equifax, Experian and TransUnion, which aims to “address the economic realities” of the 21st century.

“Access to scores and to the tips and explanations that accompany them on many of the sites give consumers a better chance to understand their credit worthiness before applying for a loan,” Burns said on the phone conference. “These scores help consumers take charge of their credit profiles and to improve their credit scores before they seek credit and when they’re ready to apply for a loan these websites help consumers consider many different credit products side by side on an online dashboard allowing them to make more informed decisions.”

The national survey also revealed that millennials (18-34 year-olds) know less about credit scores than do generation-exers (35-51 year-olds). This indicates the need for early credit education.  “On eight of nine key knowledge questions, gen-exers scored more highly than millennials,” the release states.

In a nutshell, the CFA survey advises consumers of all ages to “raise their credit scores or maintain high scores” by doing the following:

Consistently make loan payments on time every month.

Using a small portion of the credit available on a credit card.

Pay down debt rather than just moving it around, as well as not open multiple new accounts at the same time.

And check credit reports to make sure they are error-free by contacting or by calling 800-322-8228.

Crowell concludes, “Whether it’s buying a car, buying a home, managing credit card debt, managing student loan debt, all of those things contribute to your credit scores. You don’t want to default on a loan, whether it’s a car or a home – you don’t want to do that.”

Click here to comment on this article on our Facebook page.