Improving Fairness

Credit Repair Organizations Improve Fairness and Racial Equity in Credit System that Perpetuates Racial Disparities 

It has long been documented that the credit reporting system perpetuates and exacerbates racial inequities. Another persistent problem in the credit ecosystem are frequent errors on consumer credit reports that negatively impact credit scores. It comes as no surprise that a landmark FTC study found that “white participants [in the study] are less likely to have confirmed errors” that resulted in a change in their credit score than non-whites. 

Blacks, Hispanics, and other minorities have lower credit scores than white Americans. Lower credit scores result in higher costs for minorities for credit products or outright exclusion from access to credit. This compounds the difficulties racial minorities face in climbing the economic ladder and building wealth. Racial disparities in the credit system are yet another example of the structural racism that persists in American society today. 

AACCP members advocate on behalf of minority consumers in the credit system to help restore a measure of fairness and get minority consumers the access to credit they deserve. 

In addition to fixing errors, CROs help educate consumers on credit reports and how to build positive credit and use credit responsibly. These services can be especially beneficial for minority communities, which are notoriously underserved by the banking and credit system. Numerous studies have found that minorities typically have less credit history and are less familiar with credit and credit reporting than their white counterparts of a similar age. Working with the credit professionals at AACCP member organizations can help minority consumers improve their overall credit position and increase their access to credit products. 

Credit Repair Organizations cannot fix the structural inequities in the credit reporting system, but AACCP members can and do help consumers recover the credit score they deserve by removing erroneous information and educating their clients on how to build and manage positive credit.