Latino Community Has Higher Debt, Lower Credit History – NBC Los Angeles - time.news

By FYH News Team

Published on April 23, 2022

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April is the month of financial education, and according to experts, the Latino community is the one with the most debt and the least credit history.

The Latino community is lagging behind on the subject of household finances, and apparently one of the reasons is that, as immigrants, we do not know how the economic system works in this country, here is important information for you.

Latinos in the United States are a great economic force, but for the most part, they are unaware of the best way to manage their personal finances.

A study highlighted that half of the people in that country do not have the money to face an emergency of a thousand dollars.

It is during such emergencies that consumers fall into debt, which, over time, seems impossible to pay off.

“In general, a person who has to take out a loan is because it is an emergency, that they have had a medical emergency, something that has to do with their transportation, or a family problem,” said George González, director of communications of ‘Opportunity’.

This month [de abril] is dedicated to helping people assess their household spending and focus on getting out of debt and building a credit history.

“Having a good credit history is very important to be able to get ahead in the country. Why? Because your credit matters in the type of vehicle you can drive, the type of home you can have, even the type of job you can get,” González added.

The dilemma is, how do you create a good credit history, when you still don’t have credit, and obtaining it seems impossible?

The simplest options are to obtain a personal loan or a credit card, but beware, experts say, you have to be careful with interest.

“The options for people who do not have a credit history are very limited, in general, a person with no credit history is going to have to include or have very high interest rates, or go to a loan that is not going to give them dividends. economical,” he added.

So what should you look for before accepting a loan?

“There are several elements, but basically that they have fixed payments, and that at the end of the loan there is not going to be a large payment known as a “balloon payment”, secondly, that the loan they request is not going to report in their credit history that the APR does not exceed 36% as is commonly established by government agencies.

And you have to be very careful in particular with those overnight loan sites, which usually only give terms to pay in a few weeks and set extremely high interest rates.

“These lenders are considered predatory lenders, because they don’t leave you a credit history and you only have weeks to pay off the loan and the interest can exceed more than 400%,” González said.

Plus, as you build your credit history, you’re also advised to review it frequently, and you can do it for free three times a year at freecreditreport.com.

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