The Consumer Financial Protection Bureau finds that one in every 10 adults – or 26 million people – do not have any credit history with a nationwide consumer reporting agency, according to their new report. Black consumers, Hispanics, and consumers in low-income neighborhoods are more likely to have no credit history with a national consumer reporting agency or have enough credit history to produce a credit score.
Consumers with a limited or nonexistent credit history face greater challenges in getting credit, such as in being able to qualify for a mortgage to buy a home, according to CFPB. Credit histories help consumer reporting agencies determine how likely consumers are to repay their debts and the information is used to produce credit reports and scores.
“Today’s report sheds light on the millions of Americans who are credit invisible,” says CFPB Director Richard Cordray. “A limited credit history can create real barriers for consumers looking to access the credit that is often so essential to meaningful opportunity—to get an education, start a business, or buy a house. Further, some of the most economically vulnerable consumers are more likely to be credit invisible.”