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‘Fix the errors and a lot more people will flow through the system’: The credit ecosystem may need a makeover

  • Credit invisibility is still very much alive in the U.S.
  • But it may not be just one problem within the system that’s causing the mess. Rather, it could be the whole system.
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‘Fix the errors and a lot more people will flow through the system’: The credit ecosystem may need a makeover

Being credit invisible means having little to no credit history for lenders to evaluate whether or not they can trust you with a loan. Around 26 million Americans are considered credit invisible, according to research by the Consumer Financial Protection Bureau. 

Matt Harris is the CEO and co-founder of Bloom Credit, an API platform that acts as a bridge to create access between credit bureaus’ data and fintechs that want to offer credit products. According to him, the credit measuring ecosystem is one messy salad bowl of legacy systems, faulty credit measurements, and banking deserts. And minority communities, which are most likely to be in places with little to no access to FDIC-approved lenders, are most likely to suffer the consequences.

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“There’s a system that’s kind of stacked against consumers being able to create credit identity, specifically in minority communities,” said Harris at Tearsheet’s DataDay Conference in May. “And we kind of just discount it. We don’t really have a real conversation about how to establish these things.”


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