Inequalities within our financial and credit systems are pervasive. Some are rooted in systemic structures, while others stem from unconscious biases ingrained in local cultures. The systemic issues are the most challenging to address, as they are deeply embedded in the framework of the system itself. Unfortunately, these problems often go unresolved, and the wealth divide continues to grow wider.
Who’s Responsible for Change?
Is it the lawmakers? The regulators? The banks? The credit bureaus or credit scoring companies? Perhaps the school system or non-profits? The truth is, no single entity has the motivation, budget, or drive to tackle these issues comprehensively. While incremental progress is being made, meaningful change is happening far too slowly. People need solutions now.
Our answer is clear: The people themselves must take responsibility for driving this change. Those who are disadvantaged have the most motivation to fight, organize, and spark a movement. When enough individuals come together, they create the momentum needed to ignite real transformation.
The Path to Change
So, how do we start? The first step is education—understanding credit, the backbone of most financial transactions. Once you grasp how the credit system works, you’ll see how it’s stacked against those without resources. Much like the adage about wealth—“it takes money to make money”—we can say, “it takes credit to get credit.” Sadly, these truths don’t bode well for the underprivileged.
Research reveals the scope of the problem. Federally funded studies have shown that a large portion of the population relies on others to become “credit visible.” This might involve having someone co-sign a loan or add them as an authorized user on a credit card. As of 2010, 26 million U.S. consumers—11% of the adult population—were considered credit invisible, meaning they had no credit record. Another 19 million adults (8.3%) had credit files that were un-scorable by traditional credit models. In total, nearly 1 in 5 adults lack a credit score (CFPB Data Point: Credit Invisibles).
Breaking the Cycle
How can someone without credit build their credit? The harsh reality is that it is often very difficult and commonly requires help from others of (approximately 25% the time according to a study from the CFPB). This dependence highlights the systemic inequality: a person from an affluent neighborhood is far more likely to have access to a friend or family member who can assist them in becoming credit visible than someone from an impoverished area. In the end, credit scores—like so many other aspects of financial success—are heavily influenced by who you know. Demographics and culture play a significant role, creating a problem we can no longer ignore.
Enter the Tradeline Industry
For over 20 years, the tradeline industry has operated largely outside mainstream awareness. The strategy—adding someone as an authorized user to a credit card—is hardly new. It has been part of American financial culture for over four decades. In fact, studies show that nearly 30% of adults have at least one authorized user account on their credit reports.
What makes the tradeline industry unique is that it makes this strategy commercially available to everyone. For a fee, individuals can be added as authorized users on someone else’s credit card to potentially benefit from the account’s positive history.
At first glance, this may seem questionable. Is it legal? Is it ethical? The answer lies in understanding how this practice has been widely accepted for decades. Consider this: if a friend at church adds someone as an authorized user to help them build credit, is that wrong? Or if parents add their children to their credit cards purely for the credit benefits—without even giving them access to the card—is that unfair? These are tough questions, but they expose the reality: There is no equality in how credit is accessed.
A Tool for Equality
So, can tradelines help address credit inequality? The answer is yes—potentially. The authorized user strategy is a powerful tool that everyone should have access to, regardless of their socioeconomic background. For those in impoverished communities, where friends and family may lack the creditworthiness to help, the commercial tradeline industry can provide a critical lifeline. It’s not a perfect solution, but it’s a step toward leveling the playing field.
Time for Action
If you recognize the credit inequality we’ve highlighted and believe in Equal Credit Opportunity, we invite you to support our movement. Send us a message through our contact page with your information, and we’ll add you to our list of supporters while keeping you updated on news and additional ways to help. If you’re interested in playing a more active role in driving change, let us know—we’d love to connect and discuss how you can get involved.
What Else Can You Do?
- Educate Yourself: Learn how the credit and financial systems work. Resources are widely available online.
- Build Your Credit: If you don’t have friends or family with good credit to help you, consider purchasing tradelines through reputable companies. Do your research carefully, as not all companies are trustworthy. (Note: Money Advisors does not endorse specific tradeline companies. Use our forum for community guidance.)
- Spread the Word: This movement provides the spark, but it is the people who bring the fire. Be the fuel to spread the fire and together we will create change.
Be the solution. Empower yourself. Spread the Word.
