News Roundup: New study shows gap in credit scores between black and white communities

The growing use of credit scores as a screening method for rental apartments, home loans and utilities could create a significant difference in economic opportunity for people with low credit scores due to both the lack of credit history and poor repayment history. This could negatively impact African Americans based on a new study from the Woodstock Institute that shows that black communities are four times as likely to have credit scores in the lowest range than highly white communities.

Increasingly, credit scores are commonly used for rental housing, low-cost mortgages, utilities, auto loans and credit cards.

Traditionally,
credit score is calculated based on payment history, types of credit
used, amount of outstanding debt, length of credit history, and other
variables. However, they don't take into account on-time payments for
utilities, cell phone bills, insurance premiums, rent, consumer loans,
or health care. Use of this sort of alternative payment history data
might improve the scores for many people who lack history with traditional
credit.

Also in the news...

  • A loophole in Illinois law allows attorneys to charge upfront fees for loan modifications, and some mortgage rescue companies profit off this by hiring lawyers to collect these fees from consumers whether they complete the job or not.
  • The Chicago Sun-Times reports that the wide-open mayoral race may cause 20 seats on the City Council to change hands due to an increase in voter turnout. 
  • The FBI says that both violent crime and property crime are down nationally, and in Chicago, for the third straight year.
  • Burnt Korans were found on the doorsteps of two Islamic centers in the U.S. last weekend, one in Lansing, Mich., and one in Knoxville, Tenn. Knoxville police are collaborating with the FBI in an investigation. 
  • The Fraternal Order of Police is calling for police Supt. Jody Weis to resign in a letter posted Monday to the group's website.
  • Crime on the CTA rose 26 percent overall in the past four  years, according to a Chicago Sun-Times report. Specifically, robberies rose 77 percent between 2006 and 2009.  
  • Englewood's Robeson High School will lose nearly 15 percent of its teachers after 500 fewer students showed up than expected. Chicago Public Schools currently has no mechanism to show where its students are going to high school.

-Compiled by Louis McGill

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