Last week, FUND Community Institute released its report, Bending Toward Justice: Credit Scores as a Measure of CDFI Impact. While the central finding is that small dollar credit building loans offered by CDFIs have a positive effect on borrower’s credit scores, the project team also investigated various other aspects of how CDFIs help borrowers to build credit.
One such aspect was how CDFIs communicated these changes in credit score to their borrowers. The survey findings show that the majority of CDFIs (54%) meet with borrowers in-person to discuss changes. A large group of 31% do not communicate the changes to the borrower. Finally, 23% communicate via email, 15% via an online platform, and 8% via letter.
These findings provide an interesting lens into how CDFIs are working with borrowers. While many aspects of life have become increasingly technology-based, the majority of CDFIs are still primarily working in-person with borrowers. It is also interesting to reflect on the 31% to whom no changes are communicated. Perhaps this means that borrowers will check their credit scores on their own or perhaps they will be unaware of the changes.
How does your CDFI communicate with borrowers?