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22 CFPB REPORT FINDS 26 MILLION AMERICAN ADULTS HAVE NO CREDIT HISTORY A report entitled "Data Point: Credit In- visibles" published by the Consumer Financial Protection Bureau (CFPB) Office of Research found 26 million American adults (about 10 per- cent) do not have a credit history with any of the three nationwide consumer reporting agencies. ese adults are referred to as "credit invisible" by the Bureau's director. Also according to the report, black and His- panic consumers as well as those in low-income neighborhoods are more likely to have either no history or not enough credit history to produce a score with a nationwide consumer reporting agency. "Today's report sheds light on the millions of Americans who are credit invisible," CFPB Director Richard Cordray said. "A limited credit history can create real barriers for consum- ers looking to access the credit that is often so essential to meaningful opportunity—to get an education, start a business, or buy a house. Fur- ther, some of the most economically vulnerable consumers are more likely to be credit invisible." ree-digit credit scores generated by one of the three nationwide consumer reporting agen- cies—Equifax, Experian, and Transunion—are important to Americans because decisions to grant credit are most often made based on these credit scores. us, Americans with little or no credit history face significant obstacles in obtain- ing credit. ese three bureaus generate reports on a consumer's credit history, which reveals how likely a consumer is to repay a debt, using infor- mation about how that consumer has handled payments for bank loans, car loans, credit card bills, student loans, and mortgages. A consumer's credit history also shows payment histories, how much the consumer owes, and whether that consumer has a court judgment or lien. e bureaus assign a credit score based on these credit histories. According to the CFPB's announcement, consumers with limited credit histories can be placed in two groups: "credit invisible," which means the consumer has no credit report, or "unscored," which means the consumer has some credit history but not enough to generate a credit score or the consumer's credit history is "stale" and out of date. e report found 26 million adult Ameri- cans—about one in every 10—do not have a credit history, thus making them "credit invisible," compared to about 189 million adult Americans with credit records that can generate a score. About 19 million consumers (approxi- mately 8 percent) have some credit history but not enough to generate a score. is number is closely split between those who have insufficient credit history to produce a score (9.9 million) and those with "stale" or not recent enough credit (9.6 million). Also according to the report, about 30 percent of consumers who live in low-income neighborhoods are "credit invisible," and an additional 15 percent in those neighborhoods have unscored credit records compared with only 4 and 5 percent, respectively, in upper-income neighborhoods. Also, the report found black and Hispanic consumers were more likely to be "credit invisible" or have unscored credit histories than their white or Asian counterparts. e CFPB reported 15 percent of black and Hispanic consumers are "credit invisible" while 9 percent of white consumers fit in that category. ir- teen percent of black consumers and 12 percent of Hispanic consumers have unscored credit, compared to 7 percent of white consumers. e analysis by the CFPB suggests "these differences across racial and ethnic groups materialize early in the adult lives of these consumers and persist thereafter."

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