Today, National Disability Institute (NDI) released the brief: Access to Credit for Adults with Disabilities, based on data from the FINRA Investor Education Foundation’s National Financial Capability Study. These findings identify significant barriers to financial well-being for people with disabilities that go beyond the challenges faced by others with similar incomes.
Although many people with disabilities work in well-paying jobs, adults with disabilities are more likely than those without disabilities to have lower incomes, lower levels of education, less attachment to the labor force and higher expenses. These factors are strongly associated with financial capability, credit scores and access to credit. However, research reveals that adults with disabilities are credit constrained beyond general socioeconomic predictions.
In today’s economy, credit is an important tool for financial well-being. Credit can enable families to buy a home or a car, pursue education or business creation or prepare for a medical emergency or drop in income. Findings in the report indicate that individuals with disabilities are less likely to have a credit card and are less likely to have common types of credit like auto loans or mortgages. According to the findings, a consequence of not having access to affordable credit is that more than half of people with disabilities could not come up with $2,000 for an emergency.
In recent years, public and private sector organizations have developed strategies to help lower-income populations improve their “financial literacy” and “financial capability” in order to better manage their financial lives, build and preserve assets, reduce their economic vulnerability and increase their financial well-being. Generally, these strategies combine elements of financial education with motivation strategies and one-on-one or group support. Most financial capability programs cover key issues—such as budgeting, saving, debt, credit, taxes and financial products—that are important to all populations. However, they often overlook issues specific to people with disabilities. This brief identifies those issues and highlights three innovative programs that address the interrelated issues of credit scores and access to credit for people with disabilities and others with low incomes.
A digital copy of the report is available for download in the Document Library section of NDI’s website.