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Invisible ​ ​The Dangers Of Being Financially Unseen


​Regulating bad actors isn’t tricky! One reason predatory financial mechanisms has flown under the radar may be that, so far, it’s a problem that has primarily affected minority.

African Americans, Hispanics, unmarried individuals and those younger than age 30, and individuals residing in low-income or predominantly minority have nearly no credit than other groups defined by race or ethnicity,marital status, age or location.

“unbanked,” “underbanked” or “credit invisible”—and it’s hurting opportunities for gaining employment, establishing credit and building wealth through home ownership.

According to the Policy Economic Research Council (pdf), approximately 54 million Americans are “credit invisibles”—which means that they engage in creditworthy activities, such as paying utility and phone bills on time, but are effectively invisible to credit agencies, which don’t take into account those kinds of payments when determining credit scores.

And the result has harsh real-world consequences.

Renting an apartment, qualifying for reasonably priced homeowners and car insurance, getting a job if you’re unemployed and securing a promotion if you’re already working are all things that can depend on your credit score.

Predatory Financial Mechanisms Are An Inexcusable Banking Alternative

An equally disadvantaged group is “unbanked” (pdf)—the 8.2 percent of U.S. households that don’t have a checking or savings account and must rely on check cashiers or prepaid cards, of the variety that are notoriously marketed in African-American and Hispanic communities. Another 20.1 percent are “underbanked”: households that have a bank account but are still forced to use high-interest, subprime financial services, such as payday loans, to make ends meet.

More than 55 percent of black households are unbanked or underbanked, the highest of any racial or ethnic group, and this means that a majority of African-American families don’t have access to affordable financial solutions.


The Society for Human Resources Management reports that 60 percent of U.S. employers use credit checks as part of their screening process for job applicants. This is, in part, the reason many African Americans are still struggling to find work. And it also explains how credit invisibility and being unbanked or underbanked exacerbates existing racial bias in hiring and lending.

As African Americans are increasingly excluded from mainstream financial services, their options for employment and wealth creation through home ownership are exponentially decreased. Lost opportunities resulting from racially biased lenders and employers—which are difficult to quantify—further complicate matters.

Edward’s article discusses primarily the reason African American and how they are increasingly excluded from mainstream financial services, employment and wealth creation.  It’s important to know Hispanics, unmarried individuals and those younger than age 30 are equally excluded from mainstream financial services, employment and wealth creation.


​Reasons Households Were Unbanked

Unbanked households cited both economic and attitudinal reasons for remaining outside the banking system.

  • A majority (57.5 percent) of unbanked households reported not having enough money to keep in an account or meet a minimum balance as one reason they did not have an account and slightly
  • more than a third (35.6 percent) of all unbanked households reported this to be the main reason.
  • Roughly one in three (34.2 percent) unbanked households reported their dislike of or distrust in banks as one reason they were unbanked and slightly more than one in seven (14.9 percent) unbanked households reported this to be the main reason.
  • Almost one in three unbanked households (30.8 percent) reported high or unpredictable account fees as one reason they did not have accounts and about 13 percent (13.4 percent) of unbanked households reported this to be the main reason.

​2013 FDIC National Survey of Unbanked and Underbanked Households

  • One in thirteen households was unbanked in 2013. This proportion decreased from 2011, reflecting changed economic conditions and household demographics. An additional one in five households was underbanked in 2013.
  • 7.7 percent of households in the United States were unbanked in 2013. This proportion repre​sented nearly 9.6 million households composed of approximately 16.7 million adults and 8.7 million children.1
  • 20.0 percent of U.S. households were underbanked in 2013, meaning that they had a bank account but also used alternative financial services (AFS) outside of the banking system.2 Approximately 50.9 million adults and 16.6 million children lived in underbanked households.

Happy Friday 415

If your parents and their parents struggled financially! Now you’re struggling financially! Need I say more!

We get through this brings more relief, than I get through this!​ So, please share!

Our success, your success, and my success depends on what we do!

Enjoy your day everyone! Be safe in your travels!


​Credit Coach Tyrone

Happy Friday 418


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