Nearly 60,000 Philadelphians have no credit. With no credit — really, no credit score — you can’t get a credit card, buy a car or a home, rent an apartment, get a loan, or, in many cases, get a job.
As of 2023, the average credit score for Philadelphians was 669, just above the minimum to qualify as “prime” or good enough to receive a loan. A quarter of Philadelphians are under or unbanked, meaning, they either have no bank account whatsoever (unbanked) or they a have bank account, but mostly use other, non-credit-building means — payday loans, check-cashing services, money orders — to get by (underbanked). None of these situations create financial stability, let alone build wealth, among our neighbors.
But that might be changing, albeit slowly, thanks to a Boston-based initiative that’s arriving in Philadelphia.
Finanta, a nonprofit Community Development Financial Institution, has worked for decades to help people in Philly and PA broadly improve their credit and start building wealth. About 75 percent of the people who have been through their program have improved their credit scores.
Now, they’re teaming up with the nonprofit Congreso de Latinos Unidos to launch Philly Builds Credit, an initiative based on a Boston program that is designed to help people establish credit scores, improve their credit and then start to build wealth through saving and buying homes.
A decade of helping Bostonians build credit
In 2017, then-Boston Mayor Martin J. Walsh worked with the United Way of Massachusetts Bay, and LISC Boston to launch Boston Builds Credit to help improve the low or no-credit score of approximately 250,000 Bostonians.
Back then, Boston also had a much worse racial wealth gap than Philly. In 2015, the median net worth for a White family was $247,500; for Black families, was … $8. That astonishing figure has some caveats: The sample size was small, and it didn’t include immigrant households. Still, it was a vast disparity. In Philly, the median household income is $62,000 for White residents and $35,000 for Black residents, according to data from Pew Charitable Trusts.
To help narrow the gap, Boston Builds Credit took a four phase approach: identifying the need for credit building; establishing a network of partners, like CDFIs or nonprofits to help with education and building credit; documenting their partners; and establishing paths to support people throughout their credit journeys. They offered credit building workshops, credit counseling sessions and ongoing financial coaching.
The program worked — and works. More than 8,000 people have attended free credit building workshops. Upwards of 8,000 more have participated in financial coaching. More than 2,000 have improved their credit score by 30 points or more, achieved a prime score or established a credit score. Participants have been able to pay down debts, start saving, and secure car loans and mortgages. It’s also helped immigrants to Boston understand the United States’ credit system.
Participant Jerimyah Juste increased his credit score from 593 to 666 in three months. Beforehand, “No one really broke down for me what the purpose of the credit card was for,” he says. “I was just using it, thinking it was my money.”
Building credit in Philly and across the country
Carli Cisna, a training institute manager with the Credit Builders Alliance, a national nonprofit that has helped other cities adopt programs similar to Boston’s, calls the program “one of the more successful credit building initiatives.” Its success led to its expansion. The Credit Builders Alliance has brought similar programs to nine other U.S. cities, including Atlanta, St. Louis and Minneapolis. This spring, Philly Builds Credit became the tenth.
Finata and Congreso de Latinos Unidos, a nonprofit focused on helping Latinos in Philly achieve economic stability, are taking the lead, working to bring together other partners, like Xiente, The Welcoming Center and other local nonprofits.
These organizations have the experience: Finata has long held workshops on budgeting and credit building. They also offer step loans, small amounts of money that, when repaid, can increase the borrower’s credit score. As a HUD-certified counseling agency, Congreso, too, has taught clients the importance of strong credit.
“Some of the challenges that we’re seeing are individuals not understanding credit in general and not knowing that it’s a stepping stone that’s going to be able to help them open doors to either buying a home, a car or even getting a phone plan,” says Hildaliz Escalante-Nimchuk, vice president, housing and financial stability, Congreso, adding she’s encountered neighbors without credit who’ve had to pay landlords two security deposits (an illegal yet common practice).
Finata and Congreso plan to hold their first credit-building workshop on July 1 at the Kensington Library and have planned additional events for August, including one focused on small business owners.
What does Philly Builds Credit hope to achieve?
The partnership between nonprofits and financial institutions on credit building initiatives is important. While financial institutions bring the knowledge and resources, community-based organizations bring trust.
“We’re building a community service and helping bridge the gap between the big systems and real people,” Escalante-Nimchuk says.
Finanta and Congreso are planning to further expand by recruiting and meeting with new partners throughout the summer and are already thinking about how to better support people through all stages of the credit journey, offering education around budgeting, saving and setting financial goals, like buying a home or saving for retirement. Separately, Finanta is launching a credit union in the fall, with physical locations with more 9-to-5 access to services.
“We want to tailor-make our workshops to where people are at, but we also want to provide the basics of credit where anybody can attend,” Finanta President and CEO Daniel Betancourt says, “We understand that we have to meet people on what journey they’re on in their financial health.”
Every Voice, Every Vote funds Philadelphia media and community organizations to expand access to civic news and information. The coalition is led by The Lenfest Institute for Journalism. Lead support for Every Voice, Every Vote in 2024 and 2025 is provided by the William Penn Foundation with additional funding from The Lenfest Institute for Journalism, Comcast NBC Universal, The John S. and James L. Knight Foundation, Henry L. Kimelman Family Foundation, Judy and Peter Leone, Arctos Foundation, Wyncote Foundation, 25th Century Foundation, and Dolfinger-McMahon Foundation.
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