The Washington Post: Credit Scores are Supposed to Be Race-Neutral. That’s Impossible.

The Washington Post, October 16, Credit Scored are Supposed to Be Race-Neutral. That’s Impossible. 

While many are told that credit scores are race-neutral, there is actually a large bias which has put Black people at a disadvantage for generations.

Yet another misconception about Blacks is that we are financially irresponsible, as evidenced by disproportionately lower credit scores. But if you trace the root cause of the poor credit histories, you’ll find a pattern of discriminatory practices.

In America, we like to think that everyone has an equal opportunity to succeed, that meritocracy — skills and effort — eliminates bias. You’ve heard the pull-yourself-up-by-your-bootstrap tropes that all come down to this: If you work hard enough and save, you, too, can be financially secure — even rich.

But the legacy of slavery endures, and Blacks must make extraordinary efforts to overcome the discrimination that is often hidden in policies or, in the case of credit scoring, products that purport to be race-neutral.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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