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OPINION: Credit Programs for BIPOC Communities Can Reduce the Racial Wealth Gap

OPINION: Credit Programs for BIPOC Communities Can Reduce the Racial Wealth Gap
Written by Publishing Team

by Tierra Bonds

“Blacks are lazy! They are financially irresponsible and buy things they cannot afford, such as jewelry and nice cars. They even have children that they cannot afford. They do not educate themselves in finances, and when they pursue higher education, they often do not get Certificates that make enough money. – said by a large portion of society using stereotypes to justify the lower economic condition of black Americans and, in some cases, their privileges.

Hearing these kinds of statements as a black teenage girl 15 years ago led me to two jobs while in high school and college. I did this to make ends meet, to break these stereotypes, and to avoid being labeled a lazy, poor, or stupid black girl. Imagine how much this weighed.

I knew that, no matter my efforts, there was no amount of hard work, income, or education that I could undo over 400 years of discriminatory and discriminatory practices.

All the while, I noticed that many of my colleagues (who were mainly white) didn’t have the same pressure to chase money because they had financial support from their parents.

When I learned about the history of America and blacks (not the history we were taught in school), I learned how deep wealth inequality is — and still is — in America. The connection between wealth and privilege is so obvious that even white men are able to see it. I was relieved to read this from Christian E. Waller, Professor of Public Policy at the University of Massachusetts Boston:

“Racial disparities in wealth are not the result of individual or family choices, but the result of structural racism in American public policy.”

Because of structural racism, it should not be the responsibility of the individual or the family alone to repair these disparities. The enduring disparities experienced by black Americans are far greater than the choices of my grandparents, my parents, or me. Much older than me I beg my grandmother to take me to drop applications and appeal at age 15; Older than working for Hollister Apparel and Corrections Department, I held two jobs at age 16 while missing out on events with my friends; Bigger than the rush from work to college night classes, trying to make up for the many racial disparities. There is no way I can fix this on my own.

How does the racial credit gap affect the racial wealth gap

To begin to address the racial wealth gap, we need to understand that the credit gap is a direct result of institutional racism. I recommend that organizations and individuals who have benefited from the generational wealth should be part of the solution and use their dollars to fix it.

Wealth = savings + assets – debt. Median wealth for whites is $171,000 and $17,100 for blacks. Home ownership and business ownership are the two most common ways to create wealth – and both require capital. Unless you have enough capital to buy a home, you will need to use credit. Credit can also come in handy in many cases when starting a business.

The average credit score is 734 for whites and 677 for blacks. I reached out to industry experts in Seattle for a real-world example of how this credit gap plays a role when creating wealth.

According to a recent report by Jennica Lynn of Compass Real Estate, the median sales price for homes in South Seattle (ZIP Code 98108) is $625,000. A Seattle-area mortgage lender also ran two pricing scenarios for a 30-year mortgage for this median home price. A person with a credit score of 677 (the average credit score for blacks) ends up paying an interest rate of 4.125% and ultimately a monthly payment of $2,877.61.

For someone with a credit score of 734 (the average credit score for whites), the interest rate is 3.5% and the monthly payment is $2,666.20. The difference per month is $211.41. This means that the average black family will pay an additional $2,536.92 in interest each year. This equates to paying an additional $76,107.60 over the term of the loan.

Let’s see this in another form:

734 credit score 677 credit score
Postal code 98108 98108
house price $625,000 $625,000
Term of the mortgage 30 years 30 years
Interest rate 3.5% 4.125%
monthly payment $2,666.20 USD 2877.61
Additional interest paid annually 0 dollars USD 2536.92
Additional interest paid over the term of the loan 0 dollars $76107.60

What can one do with an extra $2,536.92 per year? What if it was invested in an investment account over those same 30 years at a modest interest rate of 1.5%? And $76,107 turns into $110,000, further widening the racial wealth gap.

Think about this for a moment.

How can we say we care about reducing the wealth gap if we don’t care about the credit gap and we’re fine with black families paying $76,107 in interest only compared to the average white American?

How can we address the credit gap?

Well, that’s what we do at Take Charge Consulting LLC. I established the company in 2017 after experiencing bad credit complications. I had trouble finding companies I trusted to help me and didn’t know where, how, or if I could get help. I knew that if I struggled with getting credit, others in my network were because we weren’t taught about this in school.

At Take Charge Consulting LLC, we focus on credit repair and use the Fair Credit Reporting Act (a law enacted to allow consumers to dispute items on their credit report) for the benefit of our customers and their credit repair. By removing negative accounts from their credit report, customers can see increases in their credit score. Our program also provides credit building/rebuilding and credit education. Through a combination of credit repair, rebuilding, and education, we have been able to help hundreds of individuals experience the benefits of good credit, which is most commonly home ownership and starting a business, giving them a chance to build wealth.

Who Should Be Responsible for Addressing the Credit Gap?

As the credit gap narrows, our economy and all citizens will benefit. Unfortunately, the burden of correcting this unfair system falls on those who have already been affected by it. I see this all the time in my work. Many people who hire us for credit repair struggle to add another bill to their budget. And many of them are unable to afford our hiring at all, which leaves them continuing the cycle of bad credit, leading to bad credit. Some are looking to solve their poor credit with internet solutions that could be myths, hurt their credit further or waste their money.

Organizations (nonprofits, financial institutions, churches, and schools) that focus on serving the underprivileged and interested in helping people build wealth should focus on credit reform and credit education. If these organizations do not offer credit repair, they should partner with a reputable credit repair company to help them do so. Many organizations provide financial literacy education which is great; However, this does not solve the credit or wealth gap. Access to credit is what is needed, and access to credit for many marginalized individuals means repairing their own credit.

So, what can you do as an individual?

Individuals who have benefited from the generational wealth should also be responsible for addressing the credit gap.

Here are a few options:

  1. sponsoring one person to place them in a reputable credit program; You can do this through my company.
  2. Donate to nonprofit organizations that provide credit repair. Here are some of the nonprofits that have partnered with Take Charge Consulting LLC to offer credit repair to their communities:
  3. Share this article with your network because many are not aware of the ethnic credit and/or wealth gap.

What can you do as an organization?

Here are a few options:

  1. Partner with a reputable credit repair company to provide credit repair and credit education that works for your organization and your clients.
  2. Hire employees and create a team that provides credit repair and credit education to your clients.
  3. Offer credit repair as employee benefits to your employees.

Eliminating the racial wealth gap will take much more than that

The credit gap alone will not close the racial wealth gap; We need more solutions. For example, black reparations are critical to addressing the racial wealth gap and restoring wealth that has been stolen and withheld from the country’s black families for centuries. Reparation is a way to address these grievances on a broad and national scale. And as we work on great structural solutions, let’s also do what we can, at the moment, like helping people access more wealth through good credit.


We all know that home ownership and business ownership is a sure way to build wealth and for this reason, good credit is needed. Because of institutional racism, it is everyone’s responsibility to repair these disparities, especially organizations that serve the underprivileged and individuals who have benefited from the wealth of generations.

Investing in credit programs for the underprivileged is a simple and necessary step you can take today to reduce the credit gap, which in turn can reduce the racial wealth gap now and for future generations.

The South Seattle Emerald is committed to providing space for a variety of viewpoints within our community, recognizing that different viewpoints do not nullify mutual respect between community members.

The opinions, beliefs, and viewpoints expressed by contributors to this site do not necessarily reflect Emerald’s views, beliefs, and views or the official Emerald policies.

land bonds Founder of Take Charge Consulting LLC, which provides credit repair and business consulting to allow young professionals to reach their credit, income, and lifestyle goals.

📸 Featured image: Photography by Yulia Yaspe /

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