Community Credit: A New Perspective on America's Communities

• Activity Number: 444
• Type: Contributed
• Date/Time: Tuesday, August 11, 2015 : 2:00 PM to 3:50 PM
• Sponsor: Government Statistics Section
• Author(s): Kausar Hamdani*
• Companies: Federal Reserve Bank of New York
• Keywords: community development ; household credit ; cluster analysis ; economic mobility ; data visualization ; financial empowerment

Abstract

Community Credit is a new way to describe the financial well-being of communities by examining the local credit environment. We identify the local 'credit economy,' defined as all adults in geography who have a credit file and a credit score with a major credit bureau. We then characterize the local credit economy using various measures of credit inclusion, and calculate the impact of credit stress and mobility on the community. The unit of interest is the community, referenced by a location, not the average or median borrower as in other credit analyses. The data allow consistent comparisons across locations and time to guide policy and provide benchmarks to assess programmatic progress.