Access to credit is a cornerstone of financial security and an important wealth-building tool. Being able to take out a loan with low costs and affordable terms and conditions (e.g., fees, interest rates, etc.) supports long-term household savings and facilitates purchases that contribute to wealth building and prosperity. In that sense, access to credit is, in itself, an asset.

But millions of Americans are “credit invisible.” According to the Consumer Financial Protection Bureau (CFPB), approximately 45 million Americans are outside the credit mainstream because they have a thin credit file or no credit file at all.1 The consumer credit bureaus lack sufficient loan repayment records to generate these individuals’ credit scores. Additionally, Prosperity Now’s 2017 Scorecard reports that 49% of Americans with credit scores have “subprime” scores, meaning their access to credit doesn’t necessarily prevent them from avoiding more expensive borrowing options.2

• 1. Kenneth P. Brevoort, Philipp Grimm and Michelle Kambara, Data Point: Credit Invisibles (Washington, DC: Consumer Financial Protection Bureau, 2015), http://files.consumerfinance.gov/f/201505_cfpb_data-point-credit-invisibles.pdf.
• 2. “Consumers with Prime Credit,” Prosperity Now Scorecard, July 25, 2017, http://scorecard.prosperitynow.org/data-by-issue#finance/outcome/consumers-with-prime-credit. Data Source: Community Credit: A New Perspective on America’s Communities (New York: Federal Reserve Bank of New York, 2017).