According to the Urban Policy Institute, members of Native and Minority communities in New Mexico on average have double the rate of sub prime credit scores. Forty percent of Native and Minority community members in New Mexico have subprime credit scores, compared to twenty percent in majority white communities.
The same hold true for debts in the hands of debt collectors. Twenty five percent of people in majority white communities have at least one debt in collection while that number jumps to fifty percent for Native and Minority communities. Even though credit health has slightly improved during the pandemic, there has been no decline in the large disparity in racial inequality in credit health.
Americans in the credit system who have subprime credit are typically offered the highest cost credit on the least favorable terms. Subprime lenders often target subprime borrowers to increase the price of products and services being sold and increase short term profit. Subprime credit is generally a credit score below 600. When unscrupulous lenders serve as credit gate keepers, including pay day or installment lenders or auto dealers, the high interest charges are unaffordable and lead to default or a cycle of never ending debt.
According to UPI, "Majority-Black communities and majority-Native American communities have the lowest median credit scores and the highest debt in collection rates, subprime credit score rates, and use of high-cost payday and other Alternative Financial Services (AFS) loans. These racial disparities reflect historical inequities that reduced wealth and limited economic choices for communities of color."
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More information about the report including graphs can be found at the link: