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Credit: An Asset to Opportunity By Janice Parker /Certified Consumer Credit Educator and Counsellor

Janice ParkerThere is an estimated 45 million people in the United States who are unable to borrow money from a mainstream lender to finance a business, buy a home, pay for college, cover medical expenses or even buy a car to get them to and from work.

An estimated 49% of U.S. credit users have prime credit ratings (720+ scores), meaning the 51% who have a sub-prime credit score are generally forced to borrow at sometimes exorbitant rates. Being unable to borrow from a mainstream lender can have devastating consequences on household family finances. One option is to not borrow at all, leaving these households disconnected from opportunities to get ahead. If you have a Dave Ramsey mindset and believe “debt is dumb”, then you must first get out of debt, then become wealthy enough that you never have to borrow again. That’s certainly a goal that we can all strive to obtain. The other option for those with “less than perfect” credit scores is to borrow from pay-day lenders or other forms of sub-prime lending which takes away hard-earned money from millions of working families each year. Many Americans have dreams of home ownership, higher education, a new car, dream vacations, home remodel, entrepreneurship/small business owner and many other dreams; however at the root of them all is the ability to finance them. Don’t let your credit and/or finances become the hindrance to you obtaining your dream. Your credit is your asset to opportunity.

Unfortunately we know that in lower-income communities and communities of color, we are more likely to be credit invisible or unscoreable, meaning we don’t have any or enough credit to be scored by the credit reporting agencies. Not surprisingly, low-income communities and communities of color are more reliant on predatory lenders, making their climb toward stability much steeper. Many will beg to differ and say “I’m getting by just fine”. Don’t get it twisted…..you can survive with bad credit, but it’s not always easy and definitely not cheap. Having a good credit score will help you save money and make your life much easier. Many Americans will vow to do better by their finances and teach their children to do better than they did, but get stuck at the “how”. As I’ve said many times before, bad debt is not forever so lose your pride, shame and guilt of your previous money behaviour and seek help today. The sooner you do, the better life will be! A good credit rating saves the average borrower $250,000 over a lifetime. What would you do with $250,000? Your life isn’t over so let’s get busy creating assets and accomplishing our dreams!