Freddie Mac, Colleges Aim to Improve Credit

Nearly twice as many blacks as whites have bad credit, mortgage lender Freddie Mac said in announcing a joint initiative with a group of black colleges to help get young adults started on a better track.

The findings are the results of a national credit survey Freddie Mac launched nine months ago with the help of five historically black colleges and universities. The mortgage lender began the initiative amid statistics showing that 46% of blacks own homes, compared with 72% of whites. It has contributed $2 million to the effort so far.

The study found that while bad credit crosses racial and economic lines, it is pervasive among blacks. Among all respondents, 30% had bad credit records. About 47% of blacks and 34% of Latinos had bad credit. Among whites surveyed, 27% had bad credit.

Among people with incomes under $25,000, 48% of black borrowers had bad credit, and 31% of white borrowers had bad credit. In the $65,000-to-$75,000 income bracket, 34% of blacks had bad credit, compared with 20% of whites.

Bad credit refers to consumers who have been either 90 days late on a payment in the last two years or 30 days late on a payment more than once in the last two years or have a record of delinquent liens, public records or bankruptcy.

Officials are analyzing the results to develop an initiative, which will include some college courses to help consumers obtain and maintain good credit. The program will include distributing an educational curriculum for teenagers and young adults.