Credit Deserts

Credit desert is a term used to refer to an area, often urban, where credit is difficult to obtain and is expensive, if available at all. Households have limited access to the mainstream economy, usually because of poor or limited credit histories. Some individuals may not have verifiable sources of income if they work irregularly or receive payment in cash, which in turn limits eligibility for credit. Without a favorable credit history, one is all but invisible to traditional lenders, although this does not ameliorate the need for credit, especially in households with limited liquid assets. In cases where cash is needed urgently for pressing expenses, such as paying rent or financing an unplanned car repair, consumers may be vulnerable and insufficiently discerning about available ...