How structural racism plays a role in lowering credit scores

I remember starting out in the "adult" world -- poor decision on my part rated low credit scores; better decision caused my score to rise. I found this true for my kids also. Blaming racism is a poor substitute for poor decisions and it only enables continued poor decision-making

1.) Average Credit Scores by Race

Although disparities exist among racial groups, all have good scores on average

By SABRINA KARL Updated June 07, 2022
Reviewed by KATIE MILLER
Fact checked by SKYLAR CLARINE

A study of average credit scores for different racial groups shows substantial disparities, with Hispanics scoring on par with the national average, and the average score for Blacks falling far below that level. Meanwhile, the White and Asian populations register scores significantly higher than the average.
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Here is how the numbers break down.

KEY TAKEAWAYS

* Credit scores do not factor in age, race, income, or place of residence. 

* However, the financial factors that are used to calculate credit scores can disproportionately affect certain racial groups.

* Asian and White populations in the United States have the highest average credit scores. Hispanics roughly match the national average, and Black credit scores as a group are below average.1

* The average score among all of the groups is considered Good to Very Good.

SOURCE : https://www.investopedia.com/average-credit-scores-by-race-5214521



2.) • PERSONAL FINANCE FINANCIAL LITERACY

The Racial Gap in Financial Literacy
National data surveys reveal gaps among groups in the U.S.

By DANIEL THOMAS MOLLENKAMP Updated May 12, 2022
Reviewed by PAMELA RODRIGUEZ
What Is the Racial Gap in Financial Literacy?

“Financial literacy” is a term used to describe a person’s ability to comprehend and use financial skills, such as personal finance, budgeting, and investing. 

It is sometimes used interchangeably with “financial capability.” Its opposite is “financial illiteracy,” which is meant only as a description of financial knowledge and not as a pejorative.

The racial gap in financial literacy describes the difference in financial literacy between racial groups.

Financial literacy is one of a few factors that affect the broader concept of economic well-being, which also includes the ability to make ends meet, plan ahead, manage financial products, and make good decisions.
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According to national surveys, basic financial literacy in the United States is generally low, and federal surveys reveal gaps among racial groups and ethnicities.

KEY TAKEAWAYS
* Financial literacy describes the ability of people to utilize financial skills, such as budgeting or investing.

* As the use of credit cards, mortgages, and student loans has become more common, financial literacy has become more crucial.

* There’s a disparity in the rates of financial literacy across different racial and ethnic groups in the United States, with Black, Hispanic, and Native American populations tending to have lower rates of financial literacy and White and Asian populations tending to have higher rates.

* Financial literacy is bound up with the structural factors that drive the racial wealth gap in the United States.


2a.) Why Does the Racial Financial Literacy Gap Exist?

There are five primary sources of financial education: families, high school, college, employers, and the military.

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Studies of the national survey data say that education and household income are the two biggest factors in predicting whether someone has a high level of financial literacy.
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2b.) Why Does Financial Literacy Matter?

Financial literacy can have an impact on people's financial well-being. The U.S. Financial Literacy and Education Commission—the federal body that makes recommendations for increasing financial literacy and education, created by the Fair and Accurate Credit Transactions Act of 2003—describes financial literacy as foundational for full participation in the market.

The commission says that it is especially vital for “unlocking the foundations of economic opportunity” at the individual level and “powering a strong and resilient economy” at the national level.

2c.) Closing the Gap

There are a number of public and private proposals for narrowing the racial gap in financial literacy.

The U.S. Financial Literacy and Education Commission’s 2020 proposal highlighted a set of changes to improve financial literacy in the country. It recommended establishing clear guidelines for financial educators, opening access to one-on-one financial counseling, and consistently measuring the results.

The report emphasizes the importance of tailoring financial literacy to the people and communities in need of education, which it says helps in key areas such as building motivation to learn financial tools.

SOURCE : https://www.investopedia.com/the-racial-gap-in-financial-literacy-5119258


3.) Credit scores are supposed to be race-neutral.

“That’s impossible.
Blacks must make extraordinary efforts to overcome the discrimination that is often hidden in financial policies or products that are supposed to be bias-free”

SOURCE : https://www.washingtonpost.com/business/2020/10/16/how-race-affects-your-credit-score/

https://youtu.be/MIr-OzY8-7M

History of the phrase :

1.) DOG WHISTLE POLITICS
HOW CODED RACIAL APPEALS HAVE REINVENTED RACISM AND WRECKED THE MIDDLE CLASS
IAN HANEY LÓPEZ

SOURCE :

https://www.law.berkeley.edu/php-programs/courses/fileDL.php?fID=7213


Political Correct :

“Then, the usage of the term Politically Correct was revived in the 80’s as the American political parties began to polarize and TV and other media began to play a larger role in political influence. This time it came with fear that the social liberal ideals found in some forms of PC are actually just a guise for pushing “cultural Marxism” on the culture (“cultural Marxism” is a term used by critics to paint some progressive ideals of equality, multiculturalism, and internationalism in a bad light).

Affirmative Action, Family Hour, and Tipper Gore’s push for warning labels are all examples of PC in this post 1980s era.“

SOURCE :

https://www.britannica.com/topic/political-correctness



Cancel Culture :

“To cancel someone (usually a celebrity or other well-known figure) means to stop giving support to that person. The act of canceling could entail boycotting an actor’s movies or no longer reading or promoting a writer’s works. The reason for cancellation can vary, but it usually is due to the person in question having expressed an objectionable opinion, or having conducted themselves in a way that is unacceptable, so that continuing to patronize that person’s work leaves a bitter taste.”

SOURCE :

https://www.merriam-webster.com/words-at-play/cancel-culture-words-were-watching