How to fix credit scoring

Time for a government takeover?

For many Americans, their credit score looms large over their lives. The strength of it can decide whether they're offered a loan to purchase a car, buy a house, get an education, or start a business. Increasingly, it even determines whether people can get a job at all. In short, the credit score is often the gateway Americans must pass through to participate in the economy in the first place.

And the most vulnerable Americans are the ones who most often get locked out: About 19 percent of U.S. adults either have no credit score or have records that are considered "unscorable." Among low-income Americans, that number rises to 46 percent, versus just 9 percent of upper-class Americans. So people in the former group have to turn to the predatory markets of payday lenders and pawnshops instead. "They're caught in the credit catch-22," Michael Turner, the president of the Policy and Economic Research Council, told Gillian B. White in The Atlantic. "In order to qualify for credit you have to have already had credit."

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.