Income Inequality in Boston: Why Good Credit is Essential

Boston is an amazing city with top-notch employment opportunities, award winning museums, and some of the best colleges in the country. Boston also has the highest income inequality rate in the U.S.

At the heart of the problem — poor credit. There are over 200,000 Boston residents with poor or no credit history, forcing them into higher loan rates and fees and creating a perfect storm for expense and income inequality.

To help promote economic mobility and financial resilience, Mayor Marty Walsh spearheaded the first-ever citywide effort to raise credit scores at the population level. As part of this effort, Boston Builds Credit (BBC) was launched in the fall of 2017. Boston Builds Credit, partners with more than 25 non-profit agencies that provide free credit building workshops, an optional one-time financial check-up session, and ongoing credit counseling services. BBC is available for Boston residents, including young adults ages 18 and up.

Workshops may vary their focus slightly, but they all center around credit building and financial opportunity. Some areas of focus include:

  • Building good credit
  • Budgeting
  • Consolidating student loans
  • Avoiding predatory practices
  • Owning a home

Currently, the workshops are being offered in Roxbury with plans to expand to other local areas in the city.

Why credit?

Credit scores affect every aspect of financial opportunity, from applying for a credit card or car loan, to renting an apartment, to buying a cell phone, opening utility accounts, and more. A low credit score, or non-existent credit score, is the determining factor for higher fees and interest rates, which can add up to $200,000 in additional costs over a person’s lifetime.  

“A good credit score is crucial in today’s economy, and Boston Builds Credit gives us real tools to continue our work in addressing income inequality and increasing economic mobility to thousands of our residents,” said Mayor Marty Walsh during the BBC’s launch.

Breaking the cycle

There’s good news. Credit can be improved fairly quickly and scores are not based on income or wealth.

Understanding how credit works is the first step. BBC’s goal is to reach 25,000 individuals by 2025, and help them reach a prime credit score of 660 (credit scores range from 500 – 850).

“You can go from unscored to a prime credit score of 660 in six months if you follow the rules of good credit building,” says Allison Kroner, Director of Boston Builds Credit.

“The three top rules of credit building are to have at least one active account that reports to the credit bureau, such as a credit card, car loan, or student loan; pay on time every month – if you miss a payment your score can go down 100 points; and keep your balance on any revolving lines of credit – like a credit card – at 30% or less of the total card limit.”

If you’d like to learn more about BBC, visit

READ MORE about one local United Way partner agency that is helping to close the income inequality gap.