The Geography of Credit Invisibility

22 Pages Posted: 27 Nov 2018

See all articles by Kenneth P. Brevoort

Kenneth P. Brevoort

Independent

Jasper Clarkberg

Bureau of Consumer Financial Protection

Michelle Kambara

Bureau of Consumer Financial Protection

Benjamin Litwin

Bureau of Consumer Financial Protection

Date Written: September 1, 2018

Abstract

This study builds on the Bureau’s earlier work and examines the relationship between geography and credit invisibility. The importance of geography in accessing credit has been long-standing concern for policymakers, going at least as far back as early efforts to combat redlining. In recent years, additional interest has been paid to the problems faced by people in “credit deserts,” which generally are defined as areas with little access to traditional sources of credit. Because credit deserts have limited options for accessing credit, residing in those areas may inhibit the ability of consumers to establish an NCRA credit record. If so, the incidence of credit invisibility should be higher in credit deserts than in areas with better access to traditional credit.

This study examines geographic patterns in the incidence of credit invisibility to assess the extent to which where one resides is correlated with one’s likelihood of remaining credit invisible. While determining the underlying factors that cause sustained credit invisibility is difficult and beyond the scope of this study, highlighting geographic variation in credit invisibility can aid policymakers and advance the conversation around potential causes and solutions.

Note: The views of this paper are that of the Bureau of Consumer Financial Protection. This is another in an occasional series of publications from the Bureau of Consumer Financial Protection’s Office of Research. These publications are intended to further the Bureau’s objective of providing an evidence-based perspective on consumer financial markets, consumer behavior, and regulations to inform the public discourse.

Suggested Citation

Brevoort, Kenneth and Clarkberg, Jasper and Kambara, Michelle and Litwin, Benjamin, The Geography of Credit Invisibility (September 1, 2018). Bureau of Consumer Financial Protection Data Point Series No. 18-3. Available at SSRN: https://ssrn.com/abstract=3288848

Kenneth Brevoort (Contact Author)

Independent

No Address Available

Jasper Clarkberg

Bureau of Consumer Financial Protection ( email )

United States

Michelle Kambara

Bureau of Consumer Financial Protection ( email )

United States

Benjamin Litwin

Bureau of Consumer Financial Protection ( email )

United States

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