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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 McHenryHouse fails to pass bill to promote credit fairness for LGTBQ-owned businesses McCarthy unveils House GOP task forces, chairs On The Money: House panel spars over GameStop, Robinhood | Manchin meets with advocates for wage | Yellen says go big, GOP says hold off 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 BeattyBlack lawmakers warn against complacency after Juneteenth victory Usher attends Juneteenth bill signing at White House Advocates warn against complacency after Chauvin verdict 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.”