Building wealth and health: Inside Kaiser’s credit building program

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Kaiser Permanente is a couple months into a first-of-its kind community program, one that focuses on helping Americans build their credit.

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

“When you don’t have access to financial security, don’t have access to healthy foods, or perhaps even are experiencing homelessness or something of that nature, it really does impact 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 on-time rent payments to credit bureaus —as a way it could help increase people’s financial mobility by building good credit. 

In going this route, Kaiser appears to be the first health system to launch a program focused on building Americans’ credit. So far, health systems and payers have focused other social factors that determine health  — be it through providing transportation access, addressing food insecurity or connecting patients to community resources.

It’s no secret that home ownership is becoming increasingly challenging in the U.S., and it’s an even more distant dream for individuals who are renting or lack the ability to demonstrate good credit. Those with no credit or bad credit can end up paying much more for the same services than a person with good credit — in fact, poor credit costs low-income Americans an average of $200,000 across their lifetime, according to the Credit Builders Alliance.

When homeowners pay their mortgage on time, they build credit. But most renters don’t have this opportunity when they make their payments on time. To address this issue, Kaiser launched its credit building program in September. Over the next two years, Kaiser has pledged $450,000 in funding to help 60 to 80 organizations offer rent reporting 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 partnered with the Credit Builders Alliance, an organization that increases Americans’ access to rent reporting services. Through this partnership, Kaiser and the alliance give housing providers the capability to report timely credit scores to credit bureaus, which allows renters who are making 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 reporting as part of your credit score just feels like, for us, a really great avenue to be able to unlock options that wouldn’t have been available to people previously.”

By building better credit, renters will gain the opportunity 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 that Kaiser has provided funding to is Colorado-based Neighbor to Neighbor. Through the grant, the organization can now cover rent reporting fees and provide more financial education materials to its renters. Programs like this help disrupt cycles of intergenerational poverty, which are often linked to credit, financial literacy and access to home ownership, said Christy Hayes, Neighbor to Neighbor’s director of community operations, in a statement.

Ledesma believes other health systems have an opportunity to step into this space as well. 

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

Photo: Ta Nu, Getty Images

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