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Lawmakers highlight need for financial literacy to improve credit

Lawmakers highlight need for financial literacy to improve credit

Lawmakers on both sides of the aisle said Tuesday that improved financial literacy would help bridge some of the gaps in access to obtaining credit.

“Rural communities are being left behind, urban communities are being left behind,” Rep. Patrick McHenryPatrick Timothy McHenryOn The Money: House panel spars over GameStop, Robinhood | Manchin meets with advocates for wage | Yellen says go big, GOP says hold off House panel spars over GameStop frenzy, trading apps Robinhood CEO, regulators to testify at House hearing on GameStop frenzy MORE (R-N.C.) told moderator Steve Clemons at The Hill’s “Modern Credit Systems, Alternative Data & The American Dream” event.

“What unifies both of those communities is education training and economic opportunity. We need to make sure we’re raising the rest up,” said McHenry, the top Republican on the House Financial Services Committee.

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“Things that tell me a lot about your creditworthiness are not actually a part of most credit files,” he said, arguing there is a need to expand the data used in the credit monitoring process.

Speaking at the same event, Rep. Joyce BeattyJoyce Birdson BeattySole GOP vote on House police reform bill says he 'accidentally pressed the wrong voting button' House approves George Floyd Justice in Policing Act CBC 'unequivocally' endorses Shalanda Young for White House budget chief MORE (D-Ohio), chair of the House Financial Services subcommittee on diversity and inclusion, said financial literacy programs are needed to help younger generations build and maintain good credit.

“You have to start when young folks are in school...you have to understand all of the qualities and things that have to be in your portfolio to have good credit, or better yet, how to manage your money,” Beatty said.

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The Ohio Democrat went on to say that credit also needs to be viewed through the lens of inequality. 

“I think we have to look at what history has taught us,” Beatty said at the event sponsored by FICO, noting the detrimental effects of certain lending practices over the years on Black and brown communities. “We have to look at the inequalities and the disparities that we have.”