Millions of Consumers Are “Credit Invisible”

Millions of Consumers Are “Credit Invisible”

The Consumer Financial Protection Bureau has a report on the 26 million Americans who are “credit invisible.” The Bureau found that one in every 10 adults do not have any credit history with a nationwide consumer reporting agency. About 189 million Americans have credit records that can be scored.

The report also found that Black consumers, Hispanic consumers, and consumers in low-income neighborhoods are more likely to have no credit history with a nationwide consumer reporting agency or not enough current credit history to produce a credit score.

Another 19 million consumers have unscored credit records, which is 8 percent of the adult population. The credit scoring models, which are based on credit histories, don’t produce any score for people with insufficient credit history or a lack of recent credit history.

This report raises questions about the unfairness of creditors’ relying entirely on computer based credit scores.

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