re: Are Credit Scores Racist?

I worked at a finance co, mortgage broker, and bank. The main thing I take away is that it is a cultural thing. Money today is money spent. There is a skepticism or wariness of large financial institutions, so many deal mainly with fast easy credit sources. This is reflected in lower scores because of high-risk practices. This is across incomes.

Many had debt financed for someone else who had bad credit but didn't understand the consequences of that. Also, if it is a 3rd party payee and not the original creditor, they will ignore it. That is why mortgages that are sold become an issue for some people.

I believe there is a general misunderstanding of finance by a lot of people (of many races), but it is cultural how people handle it. Lending is actually a volume business, so some in that business will take advantage.

I also had many people who didn't understand student loan debt. They thought that if they didn't get a job, they didn't have to pay for the school. I believe a lot of this is to blame on the government and schools how they push this as well as the students themselves.

That being said, credit scores are a racket, but if a person has a low score, it is usually pretty accurate. Also, people think scares are solely based on history which is not the case. It is based on risk. I don't think the majority of people who comment on this in government or the media understand this.