Building Wealth and Health: In Kaiser’s Credit Building Program

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Permanent Kaiser is just months away from launching a first-of-its-kind community program, which aims to help Americans build your credit.

When examining different social barriers to health, Kaiser realized there was a need to address the factors that negatively impact Americans’ financial mobility, according to Stephanie Ledesma, vice president of the health system. national community health health. Economic mobility is linked to health because without it people often struggle to lead healthy lives, she pointed out in a recent interview.

“When you don’t have access to financial security, or you don’t have access to healthy food, or maybe even you’re homeless or something of that nature, it really impacts your ability to be healthy and well – you’re just not focused on those things when you can’t put food on the table,” Ledesma said.

Kaiser identified rent reporting — which refers to reporting rent payments on time to credit bureaus — as a way to increase people’s financial mobility by building good credit.

Taking this route, Kaiser seems to be the first healthcare system to launch a program focused on building Americans’ credit. Until now, health systems and payers have focused on other social factors that determine health, whether providing access to transportation, addressing food insecurity, or connecting patients to resources. community.

It’s no secret that home ownership is becomes more and more difficult in the United States, and it is an even more distant dream for people who rent or do not have the ability to demonstrate good credit. Those with no or bad credit can end up paying significantly more for the same services than someone with good credit – in fact, bad credit costs low-income Americans an average of $200,000. during their lifetime, according to the Alliance of Credit Builders.

When homeowners pay off their mortgage on time, they build credit. But most tenants don’t have that option when they make their payments on time. To solve this problem, Kaiser launched its credit enhancement program in September. Over the next two years, Kaiser has pledged $450,000 in funding to help 60 to 80 organizations deliver rent reports and other credit-building programs to low-income people across the country. It has already distributed funds to nine organizations, according to Ledesma.

As part of the program, Kaiser has partnered with the Credit Builders Alliance, an organization that improves Americans’ access to rent reporting services. Through this partnership, Kaiser and the alliance are giving housing providers the ability to report credit scores in a timely manner to credit bureaus, allowing tenants who make timely payments to build credit.

“We recognize that credit, for all intents and purposes, is really essential for economic security and mobility,” Ledesma said. “Being able to have rent reports as part of your credit score seems like a really good avenue for us to be able to unlock options that wouldn’t have been available to people before.”

By building better credit, tenants will have the ability to qualify for loans that can help them accomplish things like owning a home, starting a business or going to school, she pointed out.

One of the housing providers Kaiser has provided funding to is Colorado-based Neighbor to Neighbor. Thanks to the grant, the organization can now cover the cost of reporting rents and provide more financial education materials to its tenants. Programs like this help disrupt cycles of intergenerational poverty, which are often tied to credit, financial literacy and home ownership, said Christy Hayes, director of community operations for Neighbor to Neighbor, in a statement.

Ledesma believes other health systems also have an opportunity to enter this space.

“We actually find that when we can partner with other health systems, bigger things can happen and more impact can happen,” she said. “We welcome the idea that other health systems would do the same or also launch the same type of programs. Hopefully our involvement can be somewhat catalytic for others to join as well.

Photo: Ta Nu, Getty Images

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