Why Black People Have Bad Credit (Part 1)

Today, I am held in high regards by many privileged people. We speak on stocks, credit lines, interest rates, the economy and the housing market comfortably and amicably. We casually implement high-value investments and million dollar transactions, all the while expressing our shared distrust in Toronto’s weather. I wear a suit and tie. I am intelligent, charismatic and strongly articulate. In some cases, (definitely only in some cases) I’m certain I’m even escaping the subconscious assumptions that come with my skin colour. They have gotten to know me over time. They have grown comfortable, and more importantly, have come to understand me in terms of my intelligence and capability. In this, we share a genuine interaction. I maintain the gift of objective empathy in all of our interactions. However, there is an error in our connection. It shows itself sometimes when they ask too personal a question and I realize that in order to maintain their trust and comfort I can not be entirely open with them. I am not the rare, privileged black man some of them have grown to assume I am. Instead, I am in many ways the exact stereotype that they do not empathize with. I don’t have many of the things they have. No I am not from around here, nor do I live in the area (yet). I take public transit to my home an hour away, to a not so well-off neighborhood. My advice and knowledge on investments, stocks and financial portfolios come from skillful implementation, not from personal experience. Yes, I have an understanding of the housing market, but no, I am not in pursuit of a mortgage. My non-threatening demeanor hides my history, my smile masks my struggle. And yes, I do have bad credit. Today, I wield a knowledge in finance adequate enough to wipe this stain clean from my social insurance number. I can not foresee this being part of my identity moving into my 30’s. Regardless, the man these privileged folk interact with is not cut from the same cloth as them. Although everything about our interaction says otherwise, I am a Hip-Hop loving, teenage-single-mother having, hood-grown, dealer and shooter affiliated black man… with bad credit. Some may be asking themselves why this is the case. If I have the capability to maneuver through this system beneficially to my own self-interests, then why fulfill the stereotype? Here’s your answer; my intelligence is (like many of you) innate, but my familiarity with the concept and importance of investments and financing is new to me. It has been recently discovered. In other words, I was raised innocently in socioeconomic circumstances that did not foster this knowledge. To be more frank, the general black experience does not incorporate financial literacy. And thus, we are all fated to follow similar paths, formed by the classism, racism, and culture segregation set in place long before the first breaths of our generation. By the time I woke up, it was too late for me, as it likely will be for many of you. I wonder to myself, if I am able to triumph today with these truths realized only recently, imagine being fluent in the language of credit a decade ago. What if I was taught as a child? Where would I be now?

Let’s rewind a little bit. I used a problematic term earlier that is guaranteed to result in some push back and debate. Today, we have exited the era of unified black pride, praising our similarities and sameness, and are now transcending into what some call the new black. This “new black” incorporates the idea that blackness can not be defined or categorized. Today, blacks hail from all walks of life, with various identities. Children of the financial achievers from my father’s generation are now young adults, providing a new black outlook. The black experience is arguably undefinable today, right? When I say black experience, I am not defining the overall experience of every black man and woman, nor am I boxing the potential of black people as a whole. I am simply stating that generally (keeping in mind the minimal exceptions that we praise and who’s fortune we largely exaggerate) we as black people share many of the same experiences and social handicaps in this western world. As of now, there are obvious similarities from one black person to another when analyzing the situations we are born in to and the circumstances of our lives. This means that regardless of your potential, your personality, what you identify with and how little you may relate to other black people, you share many of the same experiences. Mind you, this experience is slowly evolving, and eventually it will not be the general, over-arching norm. But for now, most of us do not have bankers and business owners for parents. Where I grew up, most of my peer’s parents were first generation Canadians who traveled here for a better life. My grandfather once told me that the first thing he saw upon setting foot in this country was a man working on a car, and so, he spent the majority of his life here as a mechanic. There was no help, no oversight, or experienced financial planner to show him the best moves to make in this Canadian economy. Like many others, my grandfather hit the ground running and started building a life for himself as quickly as he could, relying only on what knowledge of this new world he could happen upon. He tells me in retrospect he wishes he knew then what he knows now in terms of the wide array of opportunities that were available to him as a young man. Unfortunately, this is an awareness only maintained by those that have already been here for generations. By the time he became aware of many things, much time was lost. This is the circumstance I was born into. By the time I began to understand the severity of a credit score I was already behind. I remember the first time I needed someone to co-sign a loan for me so I could go to university. I quickly learned that not my father, nor my mother, not an aunt, uncle or grandparent was in a stable enough financial situation to help. My family took good care of me. It was not their fault just as much as it was not mine. I am proud of the person I have become and I owe much of it to them. However, they were not going to be the ones to teach me about GIC investments, stocks and savings bonds. Many of the people who surrounded me did not know what RSP and RESP stood for, or how they worked. I, like many, was set up in poverty and a lack of financial awareness. I was taught to work to live and to save what I could, not to have my money grow on its own.

To some, it may seem surprising that there would be people who do not have an understanding of simple banking. I considered myself a well-versed individual and an avid knowledge seeker. There are many things, however, that can only be taught from experience. And my experiences (the black experience) did not incorporate these things. I recently received a job position with a financial institution. I was not hired for my knowledge in banking, but rather, my proven potential. In this, I had a giant learning curve to account for. I was being placed face to face with people’s financial portfolios and accounts, and for the first time in my life I realized there was more to this world than CHQ and SAV. I saw rows and rows of different types of savings accounts. Some used for different reasons than others, moneys dispersed and categorized into various types of savings and investments for very specific reasons. Tax breaks, interest rates, growth aggression, joint and sole-proprietorship. But let’s avoid falling into a crash course on financial literacy. Simply put, there were things people were doing with their money that resulted in guaranteed growth from month to month or year to year. There were tax loopholes to be taken advantage of that guaranteed greater earnings and returns. There was a knowledge of debits and credits, playing a fine balance with their available funds, paying one thing with another, earning something from nothing. And these things were legal! Legal and available to anyone! Forgive my ignorance, but this was an epiphany for me. For me, yes. But common knowledge to all else in this world. Preteens walked in with their parents already comfortable and rather unimpressed with their plethora of accounts. They were being grown into this paradigm. A head start in my eyes, but an assumed expectation through there’s. So why is it this public knowledge was only introduced to me in my adult life? Why didn’t my family and friends bank in this way? Was it that no one decided it necessary to educate me on financial literacy? Or is it more likely my peers and loved ones were also unaware…


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1 comment
  1. Good article. I always ask myself the same question. Why was I not taught this sometime earlier? In ESL class or highschool. Whos responsibility is it anyway?. Mine I think.

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