New York Fed Report Finds Low-Income Counties Struggle to Access Affordable Credit

NEW YORK-The Federal Reserve Bank of New York today released a report by its Community Development team finding that the 55 million U.S. households that have trouble affording necessities also struggle to access affordable credit. Such access is important to lower-income households, since borrowing at a reasonable rate can help meet critical expenses like job training, home maintenance, or car repairs. Nearly twice as many people in low-income counties lack a credit score or file than people in higher-income counties, the report found.

The report, "Credit Insecurity and ALICE Households in the United States," examines access to credit for families that are below the Federal Poverty Level, as well as households that are Asset Limited, Income Constrained, Employed (ALICE), with income above the federal poverty level but below the cost of basics in the counties where they live. Together, those categories comprise 42% of U.S. households. The report was produced in partnership with United for ALICE, a project of the United Way of Northern New Jersey, which provided ALICE data for the report.

The report uses regional data on credit availability to compare credit access in low-income counties with access in higher-income counties. The report finds that low-income counties with better access to affordable credit had higher median incomes and higher rates of employment, homeownership, and bachelor's degree completion than low-income counties with less access to affordable credit.

Other key findings:

• Low-income counties have a greater share of borrowers who have no revolving credit, overutilize credit, have deep subprime credit, and are struggling with or delinquent on payments than higher-income counties.
• In New York, New Jersey, and Connecticut, 15% of the population live in low-income counties where people have limited access to mainstream credit, while 47% of the population live in counties that have strong access to credit and are higher income.
• One-third of people in credit-insecure low-income counties live in rural areas.

"The people who most need affordable credit to cover their education or fix their leaky roofs are far more likely to face high interest payments than more financially secure households," said Ambika Nair, a research analyst at the New York Fed.

The report is part of the New York Fed Community Development team's ongoing work on credit access. It follows the 2025 report, Credit Insecurity in the United States: 2018-2023; The State of Low-Income America: Credit Access & Housing, released in 2024; and The State of Low-Income America: Credit Access & Debt Payment, released in 2022.

The New York Fed Community Development team works to understand the economic experiences of lower-income households and communities to help build a stronger economy for all Americans. Community development is one of the Federal Reserve's core functions as the U.S. central bank, rooted in the Fed's mandates from Congress.