Thousands of young people age out of foster care with no one to help them navigate adulthood. This transition can be complicated when they find they have no or poor credit when they apply for a job, apartment or cell phone. To help, Congress enacted a law mandating that each child receive a copy of their credit report and help interpreting it before they age out of the system. This reference guide provides child welfare agencies with basic information about the platforms and services the three major credit reporting agencies — TransUnion, Experian, and Equifax — offer to help case workers meet the federal requirements. It includes a quick reference on definitions and acronyms and a list of financial education resources for youth.
Credit help for foster youth can depend on state and county processes
Findings & Stats
Poor Credit Stats
As many as 100 million Americans are excluded from the mainstream credit system due to thin or poor credit histories.
Up to 10% of foster care youth have negative credit files due to creditor errors.
No Legal Advice
Nothing in this guide is meant as legal or financial advice.
Different Needs, Different Reports
Credit reports are customized by different data sellers for the needs of different business types and the consumer.
Statements & Quotations
Going from no credit score to a good one is life changing. Just having a credit score can mean the difference between renting a room in someone else's apartment and renting an apartment of your own..…
– Tara Robinson, Mission Asset Fund
Child welfare agencies should be aware that credit freezes and fraud alerts will not eliminate existing credit problems for any consumer, including youth in foster care.
The credit check requirement presents a unique opportunity to educate young people in foster care about the importance of credit and how to protect their identities. Caseworkers, volunteers and mentors can help young people understand credit, why it is important to maintain a good credit score, and how to avoid credit and identity theft problems in the future.
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