Credit Perceptions and Participation in Mainstream Banking

This study analyzes credit perceptions in the United States and how these might impact participation in mainstream banking efforts. We use data from the 2015 FDIC National Survey of Unbanked and Underbanked Households to help... [ view full abstract ]

This study analyzes credit perceptions in the United States and how these might impact participation in mainstream banking efforts. We use data from the 2015 FDIC National Survey of Unbanked and Underbanked Households to help us determine how individuals finance themselves and what factors impact these processes. The initial data evaluation provides greater insight into why individuals might be hesitant to seek out loans and how their perceptions of their personal credit situations might impact their willingness to seek out mainstream financing. Our findings indicate that individuals that are relatively unbanked or underbanked rely heavily on the use fringe financial services (payday loans, rent-to-own, etc.). This is largely due to convenience, cost, credit issues, personal feelings about banking systems, and a general lack of knowledge of how banking systems work.