Survey suggests Americans from underserved communities lack equal access to financial education, hindering their ability to secure credit. This lack of financial literacy can significantly impact their daily lives, from renting an apartment to qualifying for a credit card.
SAN FRANCISCO, July 18, 2024 -- Financial wellness company Credit Sesame, the first platform to provide consumers free and ongoing access to their full credit information, today published the results of a new survey that took a deeper dive into the unequal digital wallets of America's underrepresented communities, exposing the gaps in financial education, literacy, and credit opportunities.
The results show that financial education is the not-so-secret weapon to gaining good credit; 85% of those who say they received some personal finance knowledge in school have good or better credit scores, compared to 72% of those who did not. In contrast, 65% of marginalized non-white participants confirmed they never received financial education as students compared to 41% of white Americans.
The survey also revealed people who learned personal finance education in school are twice as likely (nearly 60%) to reach a high-income household (over $75,000) versus those who did not receive money management skills while in school (almost 33%).
When it came to gaining personal finance knowledge at home, the survey found a racial gap in parental involvement in financial education. African American (27.4%), Asian (21.9%), and Hispanic (30.1%) respondents reported significantly lower rates of receiving financial guidance at home compared to white respondents (49.8%).
Additional select findings from the survey include:
- Nearly 1 in 3 in underrepresented communities believe financial institutions are unfair in setting interest rates
- 72% of white Americans surveyed feel marginalized communities face additional challenges in accessing affordable credit
- 68% of Black Americans surveyed believe marginalized communities face additional financial barriers compared to non-marginalized communities.
- People with bad credit (below 670) are more likely to be rejected for apartments (20.5%) than those with good credit (12.9%).
- Having bad credit can make it much harder to get approved for loans or credit cards. For example, people with bad credit are twice as likely to be rejected for a credit card (62% vs. 31%) and over twice as likely to be rejected for a loan (51% vs. 23%).
"Throughout this survey, one theme became abundantly clear - low credit scores hold people back and create challenges for everyday Americans," said Adrian Nazari, Founder and Chief Executive Officer of Credit Sesame. "People without financial education are more likely to have low credit, making it harder for them to rent apartments or get loans and credit cards. This isn't intentional bias, but it creates an unfair situation. The public education system is not equipping everyone with the tools to succeed financially. At Credit Sesame, we have made it our mission to educate everyone that they have the power and tools to raise their credit score."
To view the full press release, please visit Credit Sesame HERE.
Survey Methodology:
Credit Sesame commissioned this survey with the research company, SurveyMonkey.com to discover what financial inequities exist among marginalized communities. The data was collected between May 15th, 2024 and June 1st, 2024 from a sample of the general population of 748 participants based on a statistical distribution derived from the United States Census, ensuring a proportional representation of various demographics. Credit Sesame adhered to ethical guidelines throughout the data collection and analysis process and ensured participant confidentiality.
About Credit Sesame
Credit Sesame is a financial wellness platform, that leverages the latest technology, AI, and analytics to help consumers achieve better financial health and stability and create better opportunities for themselves and their families. Credit Sesame has helped millions of consumers improve their credit scores, increase their approval odds, lower their cost of credit, and save money. Strong credit health leads to better financial health and stability, and with Sesame Cash, Credit Sesame helps accelerate consumers' credit and financial wellness in one place. Credit Sesame is funded by leading institutional and strategic investors. It currently operates in the U.S. and Canada. For more information on Credit Sesame, visit www.creditsesame.com and follow on Instagram, Facebook, X, and LinkedIn.
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