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According to data from the Consumer Financial Protection Bureau (CFPB), up to 26 million Americans have no credit history.
“This is considered credit invisibility,” Lisa Frison, Citi’s Head of U.S. Personal Banking, Financial Inclusion and Racial Equity tells ESSENCE. “With most of the major credit bureaus, that’s a problem because we know that two things. One is that historically Black and Hispanic communities have been disproportionately considered credit invisibles. And the challenge is that credit score is often a very important unlock for getting a loan, credit card or buying a home. But also, we know that in many cases your credit score is considered for things like renting an apartment or getting a job, right? It is so critically important that, number one, we help more people who are credit invisible to become credit visible. And then second, while people are on that path, what are some other ways that we can help with that?”
One of the ways she says the company is planning to help those in of building credit is through the home lending perspective.
Citi’s two piloting solutions – including HomeRun and Lender Paid Assistance & Project REACH was designed to address enduring inequities, something Frison has experienced firsthand.
The Buffalo, New York native comes from a hardworking, lower middle class family that did “just okay” financially.
“We rented our house,” she tells ESSENCE. “I was the first in my family to go off to college and I just was totally out of my element, not knowing a lot of things I should know, including establishing and building credit as a young adult. I also really didn’t know how to use and manage credit in a thoughtful way. And I don’t even recall having conversations with my parents about whether or not they had credit cards or whether they used it. So I was little lost.”
Much like Frison, many Americans don’t know where to start in their credit building journey, and often deny themselves the dream of pursuing major financial purchases as a result.
A 2014 study conducted by the National Foundation for Credit Counseling, revealed that respondents are more embarrassed about their low or nonexistent scores than their weight or age.
“People get in their heads about not having a traditional credit score,” Frison says. “But the good news is that we actually do have ways that we can look at people who fall into that category and will still be able to underwrite them.”
Frison explains that Citi’s HomeRun program has no mortgage insurance and low down payments making it a really fitting entry product.
“More than that though, this is going to be one of the biggest ways that people can build generational wealth,” she says. “We know that is one of the biggest goals in many families, particularly in the Black community, so we do what we can to support that mission.”
She adds: “Citi intentionally placed representatives on the ground in key markets so that they can really go out and let the community know that we have these offerings. And just speaking with some of the people who are doing that work, they’re sharing with me how great it’s been to see feel more comfortable having transparent conversations about their credit invisibility.”
She also highlights that people shouldn’t count themselves out before even starting.
“I want to really drive the point home that we should not assume that because you’re credit invisible means, you have poor credit,” Frison explains. “We understand that it’s a very personal journey to buy a home. Dealing with money can be very personal for most of us. But don’t give up before even starting. You can do this and we can help.”
This interview was edited for brevity and clarity.
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