The Color of Money: Bad Credit, Wealth, and Race

American Behavioral Scientist, Vol. 45 No. 2, October 2001 223-239

18 Pages Posted: 4 Oct 2013

See all articles by Sheila Ards

Sheila Ards

University of Minnesota

Samuel Myers

University of Minnesota - Twin Cities - Hubert H. Humphrey Institute of Public Affairs

Date Written: October 1, 2001

Abstract

This article examines the myth of bad credit in the Black community. Historically, Blacks have had higher savings rates and lower use of credit than Whites. Discrimination in lending led to an aversion to credit. Later, Blacks believed their credit to be bad, even among many better qualified Black loan applicants. The authors find that there is no statistically significant difference in the average level of “bad credit” among Blacks and Whites who have been turned down for loans or who have not applied for loans, as seen in national data sets measuring wealth and expenditures. Contrary to conventional wisdom, no statistically significant difference exists in bad credit rates between Black and White households at the lowest and highest wealth levels. The authors contend that the observed differences in the bad credit rates between Blacks and Whites in the middle wealth range are attributable to different treatment of Blacks and Whites in credit markets.

Keywords: Black; Credit, Wealth, Race

Suggested Citation

Ards, Sheila and Myers, Samuel, The Color of Money: Bad Credit, Wealth, and Race (October 1, 2001). American Behavioral Scientist, Vol. 45 No. 2, October 2001 223-239. Available at SSRN: https://ssrn.com/abstract=2335077

Sheila Ards

University of Minnesota ( email )

308 Harvard Street SE
United States

Samuel Myers (Contact Author)

University of Minnesota - Twin Cities - Hubert H. Humphrey Institute of Public Affairs ( email )

301 19th Ave S
Minneapolis, MN 55455
United States

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