Credit Scores Perpetuate Past Discrimination

Credit Scores Perpetuate Past Discrimination

A report by the National Consumer Law Center entitled Past Imperfect: How Credit Scores and Other Analytics “Bake In” and Perpetuate Past Discrimination shows how past discrimination perpetuates low credit scores. Credit reporting and credit scoring are supposed to be objective, with no room for flawed tools such as human judgment and biases. Yet for years, study after study has found that African-American and Latino communities have lower credit scores as a group than whites and Asians. The report discusses how credit scores perpetuate racial and economic inequality. Eliminating the impacts of past discrimination may require treating disadvantaged groups differently. The report includes some policy reforms and a list of studies and other resources that could assist advocates working on reform.

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