The Big Problem With Credit Scores

Credit scores, which represent how likely a person is to pay his or her bills, affects almost every aspect of an American’s financial life. One key benefit built into the credit scoring system is its nondiscriminatory practice of using just numbers to determine a person’s creditworthiness. “Credit scoring when it was first developed was an advancement,“ said Chi Chi Wu, staff attorney at the National Consumer Law Center. “It is better than having some banker sit across from you and judge you and read the information in your credit report, because they bring a lot of their subjective analysis and their own life experience into the analysis. And if their life is different than your life, that analysis can be flawed.“ But despite the good intentions of credit report companies, many experts argue that the current system is still discriminatory. A survey of 5,000 U.S. adults found that more than half of Black Americans reported having a low or no credit score