High prices paid by the unserved and the underserved

LOUISVILLE, Ky. (WAVE) – Signs can be seen all over WAVE Country, for check cashing, money orders available or pawnshops.

Financially underserved or unserved families pay a high price for these services, often making it even more difficult to make ends meet.

It is very expensive to have no money because when you have no credit score, you may not have access to bank accounts, loans and credit cards.

Those who fall into the category of underserved or unserved are usually people who cannot get credit or who do not understand the importance of their credit scores.

“Credit is really important in a consumer’s life, especially for economic advancement and economic mobility,” said Nidhi Verma, vice president of international research and consulting for TransUnion.

Credit is a consumer’s financial power. In today’s world, the importance of having good credit and a good credit rating cannot be overstated.

“45 million Americans are either credit unserved or underserved,” Verma said. “Breaking it down, 8.1 million of them are invisible to credit. When you look at the other 37 million Americans, they’re underserved because they have very little participation.

These are consumers who do not have a bank account or who do not use traditional financial services and mainly transact in cash.

With a lack of credit, how do you get that first credit card or car loan?

“The credit score is a picture of you as a consumer and the risk you intel,” Verma explained.

Many lenders are reluctant to extend credit to consumers with no credit history or score. Having no credit score can be the equivalent of having a bad credit score.

Assuming someone has recurring expenses, ask those companies to report on your behalf, such as rent, utilities, or your cell phone bill.

Verma lists three things someone can do to get credit and build it:

  • More importantly, understand your credit report. Access your credit report. Be sure to check it regularly. Not one and it’s done.
  • Second, make your payments on time. If you miss any of these payments, call your lender. They may be able to offer you a more affordable payment plan.
  • Finally, do not push yourself beyond your financial capacity to manage your credit.

There are a number of things a person can do to move from being underserved or unserved to being able to access financial services.

There are digital banks. People can find one to suit their needs.

Start building a credit score by paying rent, gas and electric or cable bills on time and having these companies report your payments.

People can also try a secured or prepaid credit card. They report to the three major credit bureaus and customers won’t be able to overspend.

To examine the in-depth research study on the Unserved and Underserved Credit Market, click or tap here.

WAVE – Louisville and southern Indiana NBC affiliate. Follow us on Twitter and Instagram @wave3news.(VAGUE)

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