“Once you go Black…your credit goes bad.”
When I looked into my purse, I realized I have way too many credit cards, and the majority of them are store credit cards. How did I get myself into this?! I was led to believe that in college I had to “build my credit up” and of course that statement along with a shopping obsession was a definite boost. My father told me not to get one, but if I did only use it for emergencies. That went through one ear and out the other. Although I rarely use some of them, credit cards along with student loans is debt that could be a future risk when applying for a mortgage, car loan, etc. My credit isn’t bad but it’s not what it could be.
So have any of you fallen into the stereotype of blacks having bad credit? What is bad credit? Or have we all been brainwashed to believe that we have bad credit? These are questions that I need answers to! Our future generations are at risk of not accumulating as much wealth as our White counterparts due to this myth.
For years Blacks have been labeled as a credit risk. Back when lending was secured by a man’s word, a Black man’s word wasn’t as reliable as a White man’s word, which led to fewer opportunities for Blacks to borrow money.
Research shows that there has been/is statistical discrimination because lenders believe that Blacks have bad credit so they are more likely to deny Black loans than White. Blacks with good credit observe that Blacks are denied credit so they then begin to believe that they will be turned down and assume that they have bad credit as well. It’s disappointing that Blacks who have been turned down label the entire Black population as having bad credit.
But it is imperative that Blacks know about other credit options and actually find out their credit score. Don’t automatically assume that you have bad credit. There are other ways to borrow money other than check cashing places and store credit cards with extremely high interest rates. Begin with opening a checking or savings account. Try investing, or borrowing from other financial sources. It is also more important to discuss more about financial planning such as stock options and 401k.
Obtain your credit report for free at www.freecreditscore.com and remember the financial decisions you make now can affect your future financial opportunities.
Source:
The Color of Money: Bad Credit, Wealth, and Race.
Sheila D. Ards & Samuel L. Myers, Jr. The American Behavioral Scientist. Thousand Oaks: Oct 2001. Vol. 45, Iss. 2, p. 223-239.
