In the fall of 2020, consumer credit reporting company Experian partnered with Black Girl Ventures, an organization with a mission to provide Black and Brown woman-identifying founders with access to community, capital and capacity building in order to meet business milestones and drive economic advancement.
The partnership aligns with Experian’s commitment to driving financial inclusion and helping create more equitable access to credit and other financial resources for underserved and financially excluded communities. The company’s United for Financial Health program, which aims to empower and protect vulnerable consumers and improve their financial health through education and action, also speaks to that commitment.
Recently, I had the opportunity to sit down with the founder of Black Girl Ventures, Shelly Bell, during one of Experian’s #CreditChatLive discussions. We chatted about her background and story, the inspiration behind Black Girl Ventures, and what’s next on our agenda. Following the live conversation, I was able to ask her a few more questions about financial health:
RG: What challenges are underserved and financially excluded communities facing as they try to improve their financial health?
SB: There are three main challenges that low-income communities face when trying to improve their financial health:
- Lack of access to capital
- Lack of generational financial literacy
- Historical disadvantages related to banking
Typically, when we talk about the financial challenges facing these communities, we tend to focus on the present. But in reality, financial disparities have evolved over the course of history—especially in marginalized communities.
RG: How can the financial services community help these residents and business owners improve their financial health?
SB: In order to improve financial health, we need to enlighten, equip and give grace.
Now, enlightenment is not a term you typically hear when it comes to finances, but we need to extend far beyond just providing information. Enlightenment requires a deeper connection. We have to create a bridge between what is presently important and what can be important to increase the quality of life in marginalized communities. When a person is enlightened by financial literacy, they will feel like taking action is easier, and in most cases, necessary.
Second, equipping marginalized communities with financial education means reaching them where it matters. Most communities, including low-income communities, have a check-cashing service that allows them to cash their paychecks without an account. Could we post financial literacy information and tips there? Additionally, while financial literacy has been absent from academic settings, we need to change that narrative and provide education that demystifies the credit system. People should be taught how to strategically think about their futures and how financial literacy paves the way for financial freedom, so that they too, can enjoy life without always worrying about money.
Beyond education, we need to equip these communities with valuable tools that help them build credit. One example, Experian Boost™, allows people to add the bills they pay regularly to benefit their credit. In fact, Experian Boost has helped more than 7 million consumers collectively grow their FICO Scores by nearly 50 million points.
Finally, we have to consider ways to give grace that is rewarding and promotional; further emphasizing that when and where financial education is provided matters. Incentivizing those who are being taught with the ability to think long-term versus the ability to survive under frugal terms or means.
RG: Consumer credit is just as vital as business credit for many entrepreneurs. How do we ensure entrepreneurs from underserved and financially excluded communities have the resources they need to succeed?
SB: In order to ensure entrepreneurs, particularly those from marginalized communities, have access to necessary resources, we first need to understand what they need and what the community needs. By strategically partnering with financial institutions, schools and social networks, we can begin having those conversations; we can start bringing education to the forefront in a more accessible and creative way than previously done.
RG: What changes need to take place to advocate for more credit equity?
SB: Before we can drive change, we need to define the root of the problem. History has dictated the present and future we stand in. Without knowing how we got here, it’s hard to move forward. And once we can define the problem, we need to shift our mindset; the problems and solutions can feel a bit distant from the audience. Too many consumers still are unsure of where credit falls against other necessities, such as food, water and shelter.
To that end, advocating for equitable access to credit requires us to be more transformative in our knowledge sharing. Historically, we’ve leaned into the idea that if someone provides you education, you should be able to fare well in any situation. But I believe this to be only somewhat true; we need to take into account how people learn and relating content to the intended audience. Most people can easily consume information in short segments, so how do we translate our education into simple 60-second or three-minute long videos?
We also need to be outcome driven. In order to create credit equity, we have to integrate credit opportunities in the midst of everyday life. Again, Experian Boost™ has opened a seamless transition for consumers for marginalized and low-income communities to build credit through everyday actions.
Rod Griffin is senior director of Public Education and Advocacy for Experian.