Black Americans Are More Than Twice as Likely to Be Denied Credit

Rhea-AI Summary

LendingTree, the prominent online loan marketplace, released a study on Aug. 11, 2020, revealing significant financial disparities between Black and White Americans. Key findings show that Black men's average income is 33.7% lower than that of white men, and Black women earn 17.5% less than white women. Credit denial rates for Black adults stand at 44%, over twice that of their white counterparts. Additionally, the average cumulative student loan debt for Black graduates is $36,919, 20% higher than that for white graduates. The report indicates persistent systemic issues in economic opportunities.

Positive

• The median net worth for Black individuals increased by 29% from 2013 to 2016, showing signs of economic progress.

Negative

• Black men earn 33.7% less income than white men in major metropolitan areas.
• Black women earn 17.5% less than white women.
• Credit denial rates for Black adults are 44%, compared to 19% for white adults.
• Black graduates incur an average student loan debt of $36,919, which is 20% more than the $30,731 debt of white graduates.

CHARLOTTE, N.C., Aug. 11, 2020 /PRNewswire/ -- LendingTree®, the nation's leading online loan marketplace, released its study highlighting the financial disparities between Black and White Americans. The analysis finds that there is large economic inequality across income, wealth, savings, and credit opportunities.

Key findings

• The average income for Black men is 33.7% lower than that of white men in America's 50 largest metros. The average income for Black women is 17.5% lower than that of white women.
• Black and white income gaps persist across different sectors. In finance and insurance — which includes occupations in banking, investing and insurance-related activities — Black people earn an average income 36.9% lower than that of white people. And in educational services — made up of teachers and professors at all education institutions — Black people earn 8.4% less on average.
• Across all income levels, Black adults are more than twice as likely to be denied credit (44%) or denied or approved for less than requested (57%) than their white counterparts at 19% and 24%, respectively.
• The average cumulative student loan debt borrowed by Black undergraduate students who graduated is $36,919, 20% more than the $30,731 borrowed by white undergraduates.
• The median net worth for Black people grew by 29% from 2013 to 2016 — the most recent three-year period for which data is available — despite falling substantially in the 2007-to-2010 and 2010-to-2013 periods. The median net worth for white people rose 17% in the 2013-to-2016 period.

Tendayi Kapfidze, Chief Economist at LendingTree, adds, "It's encouraging that Americans are having these conversations more openly and with more vigor and purpose. Highlighting these racial disparities shows that systemic issues have held back generations of our fellow citizens. It is ultimately to the detriment of everyone as the economy is deprived of our best efforts by denying opportunities to many capable people. The creation of these disparities was and is often government-sanctioned and enforced, and so they should be addressed via legislative remedies in addition to societal change."

To view the full report, visit
https://www.lendingtree.com/debt-consolidation/black-and-white-disparities-study/

Methodology
LendingTree analyzed 2018 Bureau of Labor Statistics data, 2020 Economic Policy Institute report, various Federal Reserve data, 2020 Federal Reserve Bank of St. Louis data, 2017 National Center for Education Statistics report, 2020 Pew Research Center report and U.S. Census Bureau. All data is the most recently available.

About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student loans, insurance, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. My LendingTree proactively compares consumers' credit accounts against offers on our network, and notifies consumers when there is an opportunity to save money. In short, LendingTree's purpose is to help simplify financial decisions for life's meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

MEDIA CONTACT:
Nelson Garcia
Nelson@LendingTreeNews.com

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SOURCE LendingTree

FAQ

What does the LendingTree study reveal about income disparities between Black and White Americans?

The study shows that Black men's average income is 33.7% lower than that of white men, while Black women earn 17.5% less than white women.

How likely are Black Americans to be denied credit compared to White Americans according to the LendingTree study?

Black adults are more than twice as likely to be denied credit, with a denial rate of 44% compared to 19% for white adults.

What is the average student loan debt for Black graduates according to the LendingTree study?

The average cumulative student loan debt for Black graduates is $36,919, which is 20% higher than the $30,731 debt for white graduates.

What time period does the LendingTree study analyze regarding median net worth changes?

The study analyzes data from 2013 to 2016, revealing a 29% increase in median net worth for Black individuals.

Who conducted the study on financial disparities released by LendingTree?

The study was conducted by LendingTree using various federal and educational data sources, including the Bureau of Labor Statistics and the Economic Policy Institute.