Community-Level Racial Inequities in Young Adults’ Credit Scores Are Likely Driven by Differences in Wealth-Building Opportunities
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Large and persistent community level racial inequities in young adults’ credit scores shape their access to credit and borrowing costs. New evidence suggests that a significant portion of racial disparities in young adults’ credit scores reflects systemic differences in wealth-building opportunities across communities, including differences in residential segregation and housing wealth. Policies can reduce structural inequities and advance equitable opportunities to equalize returns to homeownership and education for young adults in communities of color.