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A Stacked Deck - How Credit is used to Screen Out Those Most in Need of Federally Subsidized Housing

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The article makes the case that rent and utility payment history and landlord references are more appropriate indicators of creditworthiness. It also calls for individual review of each applicant's circumstances, while taking into account a variety of factors, in order to create a fair review system that will promote the goals of affordable housing. The article includes sections on the use of credit and any application regulations and housing guidebook sections on screening applicants for subsidized housing; credit scores' disparate impact on people of color; using credit problems to disguise improper reasons for denying housing; and reasons to give limited weight to credit reports. Advocates may find this article helpful as a primer for its coverage, and description of the lack thereof, of housing regulations covering the use of credit reports in federally subsidized housing.

The primary credit scoring system, FICO, is also analyzed as are the main problems contained in credit reports, e.g. erroneous information, omission of forms of credit that low-income people use, difficulties in correcting inaccurate information, and different scores from different credit-tracking agencies.

Available from: This issue of the Clearinghouse Review may be purchased by contacting the Clearinghouse at 312-263-3830. Advocates may also want to contact their local legal services office.