By Aysha Diallo
Government aid helped narrow the gap in creditworthiness between renters and homeowners in the U.S., a sign the pandemic-era stimulus has been effective despite massive job losses. Renters’ credit scores grew by 16 points, compared with 10 points for mortgage borrowers and seven points for other homeowners, according to the Consumer Financial Protection Bureau. Renters are more likely than homeowners to be women, Black or Hispanic, and have lower incomes, the agency said in a recent report.
The findings echo Census Bureau data showing that poverty decreased in the U.S. during the pandemic. But many renters are in danger of falling behind as the aid programs that have enabled them to pay their bills run down and eviction bans expire.
“Past recessions and depressions have seen communities of color and low-income communities of all races and ethnicities left behind when the broader economy recovers,” Dave Uejio, acting director of the CFPB, said in the report. “We cannot repeat that history.”
The Supreme Court struck down the Biden administration’s moratorium on evictions last month, leaving millions of tenants unprotected.
More stories like this are available on bloomberg.com.