AUSTIN, Texas – Self Financial, a leading fintech startup enabling consumers to build credit and savings, today released the results of a third-party survey examining the impact of credit challenges among Black Americans. The survey shares insights into the unique challenges the Black community faces on the road to building credit and savings, the generational implications of money, and the goals the community is building step-by-step for in 2021 and beyond.
Self-partnered with independent research experts Wakefield Research to poll 1,000 Black American adults ages 18+ with poor credit.
Credit is a very personal topic of conversation. Nearly half (47%) of Black Americans with credit challenges are worried about being judged based on their credit score, and 43% of respondents shared that they would rather discuss their sex lives with friends than their credit scores.
Who to trust with money conversations? The top places Black Americans with credit challenges learned about money growing up are their friends or family (68%), followed by their own research or past experience (45%). Though friends or family are the go-to resource, many respondents may be wary of receiving inaccurate information. Only about 2 in 5 (43%) cite friends or family as their most trusted source for information about money. The next most trusted sources are themselves (29%) and financial planners or counselors (28%).
Hurdles for creating generational wealth. Many Black Americans with credit challenges recognize that building financial assets is something they need to focus on. However, over a third (35%) say they’re more likely to win the lottery than leave money to their family when they die.
Keeping dreams at the forefront, despite challenging times. Good credit is always important, but the impact of the COVID-19 pandemic has heightened the immediacy. Four in five Black Americans with credit challenges (80%) say having good credit is more important now than ever. If they had good credit, an overwhelming majority (86%) want to achieve some goals this year, including buying a house (41%), investing their money (39%) and starting a business (28%).
Making a game plan for accomplishing goals. The overwhelming majority of respondents (89%) are willing to take steps in 2021 to improve their credit, including paying their bills on time (56%) and saving more money (55%). A quarter (25%) are willing to limit their credit inquiries to improve their credit score and 20% are willing to apply for a credit-builder loan to improve their credit in 2021.
“Credit is required for everything from renting an apartment to buying a car or home, or even launching a business,” says Sharita Humphrey, a paid Self spokesperson who is an award-winning Certified Financial Education Instructor and former Self customer. “In the Black community, we often don’t realize that we are frequently denied our dream jobs because many employers use credit in their background check practices. Additionally, you can’t get true access to business credit, lines of credit, or loans when you’re trying to grow your business because this relies on your personal credit. You can’t skip the steps to building a sustainable business, and credit is critical.”
Humphrey experienced the setbacks of having credit challenges firsthand. As a young mother battling poverty with limited resources and a credit score in the 300s, Humphrey made a commitment to herself and her family to transform her financial situation. Determined to find the tools and knowledge to make it happen, she discovered Self, which she credits as the first step on her path to financial success. Now Humphrey is an award-winning educator, entrepreneur, and financial trailblazer, coaching others who are paving the way for financial success in their own families.
“In order to be successful in achieving financial milestones, the first step is building the confidence to shift from your old money mindset and learn how to practice positive behaviors consistently. Creating wealth shouldn’t feel as unlikely as hitting the jackpot. Budgeting, regularly saving, and planning for your future are small steps anyone can take today to better position themselves and the next generation for financial success. It’s key to know your numbers,” says Humphrey.
