Client: City of Boston, Office of Financial Empowerment and Working Credit, NFP
Funder: Citi Community Development and City of Boston
Principal Investigator: Alicia Sasser Modestino
Co- Principal Investigator: Constance Martin (City of Boston, Office of Financial Empowerment)
Description: The current credit reporting system in the U.S. creates a barrier for millions of low-income individuals with poor or no credit to fully participate in the mainstream financial system. Yet good credit is essential to achieving and maintaining financial stability, accessing opportunities, and building a future that allows individuals to pursue their career and life goals. The Boston Youth Credit Building Initiative, developed by Mayor Walsh’s Office of Financial Empowerment and implemented by Working Credit NFP, aims to build financial capability among low-income young adults. Specifically, the program provides a workshop that teaches participants how the credit reporting system works, one-on-one financial coaching on how to build or improve their credit history, and access to a secured loan and savings product that can be used to directly improve their credit score—at a time when many of these individuals are becoming financially independent. The basic premise of the program is to act as an “early intervention” to boost financial capability and develop good financial habits at a formative time when individuals are starting to build their credit history.
To our knowledge, the Boston Youth Credit Building Initiative is one of the first in the U.S. to implement such a program for young adults and evaluate the outcomes in a rigorous manner. In the course of our evaluation, we aim to determine what types of outcomes are impacted by the Boston YACBI, how these impacts are achieved, and for whom the impacts are the largest. To evaluate the program’s impact, we will use random assignment to compare the outcomes of individuals in the treatment group to those in the control group at baseline and at 6 months, 12 months, and 18 months. The evaluation will employ a mixed-methods approach using both quantitative information from pre- and post- surveys and administrative data as well as more narrative qualitative information gleaned from focus groups and interviews. We will evaluate direct outcomes such as gaining skills and knowledge, building a credit history, and maintaining good credit as well as indirect outcomes such as the ability to maintain employment and complete college. The goal is to better understand how to help young adults develop and maintain an optimal credit profile that can yield positive benefits over their lifetimes and serve as a potential model for other cities looking to develop similar types of programs.