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CIAO DATE: 3/5/2007
Give Credit Where Credit is Due
Michael A. Turner, Alyssa Stewart Lee, Ann Schnare, Robin Varghese, Patrick D. Walker
December 2006
Abstract
Despite the vast accomplishments of the American credit system, approximately 35 million to 54 million Americans remain outside the credit system. For a variety of reasons, mainstream lenders have too little information on them to evaluate risk and thereby extend credit. As a result, those in most need of credit often turn to check cashing services and payday loan providers, with effective interest rates as high as 500 percent. The lack of reliable credit places them at a great disadvantage in building assets (such as homes, small businesses, or loans for education) and thereby improving their lives.
