Prior research has established through a variety of techniques that Black and Latinx consumers generally have lower credit scores than white and Asian consumers. However, this research has often relied on datasets lacking respondents’ self-reported racial identity or has not been nationally representative, which can introduce bias into estimates. Further, while a substantial amount of recent research has uncovered racial and ethnic disparities in debt repayment and delinquency, there has been limited exploration into how other aspects of consumers’ credit histories, such as length of credit history, are contributing to credit score gaps. In this paper, we address these gaps by debuting an innovative data source – credit records matched to a nationally representative probability-based survey panel – to better understand disparities in credit scores. We use this data to estimate racial and ethnic gaps in credit scores and to explore one important source of score disparities: differences in length of credit history. We find large disparities in credit scores and length of credit history by race and ethnicity. We also find that two mechanisms used to establish and lengthen credit histories – joint account ownership and authorized usership – are less frequently utilized by Black consumers.
