Poor credit is a serious problem for low-income Americans.
Options for borrowing are limited, and people with poor credit pay more in fees when they do borrow, said Margery Austin Turner, senior vice president for program planning and management at the Urban Institute.
"Understanding credit and how to safely build credit is critical," Turner said in a webinar hosted by the Urban Institute. It can make a dramatic difference in people's financial futures, and help "move them out of poverty and into financial security."
Turner and a panel of policymakers explored some of the myths and facts about credit, and why options for low-income Americans should be expanded.
Better credit is key to helping low-income Americans keep more of the money they earn, rather than spending it on higher fees, Turner said.