Credit scores and credit checks hold many back when it comes to fulfilling their “sueñitas” (dreams).

While I was watching In the Heights, the newest Broadway Musical turned movie from Lin-Manuel Miranda, there was one scene in particular that stopped me in my tracks. It wasn’t one of the beautifully choreographed dance scenes, which were also heart stopping. It was a scene that gets to the heart of what HFLA of Northeast Ohio does–help people with bad or no credit. Here is a brief synopsis: SPOILER ALERT!

Vanessa is a young Latina woman living in Washington Heights, in New York City. She works at a salon, but dreams of moving downtown and becoming a fashion designer. She sees this move as a way of elevating herself and moving up from her neighborhood which she thinks is holding her back.

When submitting her rental application, she is rejected due to a poor credit check and is told that she would need to apply with a co-signer.

Realtor: Ah, Ms. Morales.

Vanessa: Yes.

Realtor: I’m sorry honey, I meant to call you.

Vanessa: Oh, I’ve got bank checks. First month, last month, and security, good as cash. 

Realtor: It’s just without a solid credit check, there’s not much I can do. Maybe your parents could co-sign, assuming they can prove income 4 times the rent? You know what, get it to me by 5, I’ll see what I can do. 

Despite the fact that Vanessa can prove that she can afford and reliably pay for this apartment, the credit check automatically excludes her from being able to lease the apartment independently. Vanessa does not have any family to ask that could act as a co-signer, and is either too embarrassed to ask someone else or doesn’t think anyone in her community would even be able to co-sign for her.

Seeing this scene unfold is so crucial; it authentically illustrates a real issue that many people face.

As an HFLA staff member, I was shocked to see this plot point in a popular movie, let alone a groundbreaking Broadway musical. We live in a world that does not like to talk about money in a real sense. The narratives we typically see in movies and TV emphasize the character’s poverty and “struggle” more than the systemic barriers that keep them in this cycle and prevent financial growth.

The Difference HFLA Makes

While we do not rent apartments, HFLA of Northeast Ohio has been providing 0% interest loans since 1904. We have never considered a 3-digit credit score as an indicator of an individual’s ability to successfully repay a loan. Instead, we look deeper into the applicant’s repayment history, and more importantly, their current ability to repay a loan based on their income and expenses. We understand the difficulties surrounding building credit. For example, paying rent, utilities and cell phone bills on time does not add to your credit score, but evictions or being sent to collections for not paying bills does. More importantly, we understand the difficulties life can throw at a person, how events and unexpected circumstances can derail one’s dreams and have significant financial consequences.

Though HFLA does not rely on a credit score to determine loan eligibility, we do require that all loan applicants sign with a co-signer or guarantor. HFLA is a non-profit organization that charges 0% interest, we count on the loans we disburse being paid back so that these funds can be recycled and disbursed as new loans to others. For HFLA, co-signers provide security for our funds and lending model. However, we do see first hand how this is a barrier for many, even though we have the same standards for co-signers as we do for borrowers–the credit score alone is not a determining factor.

Co-signers do not have to be family. They can be trusted friends or even community leaders. Co-signers are people who step up, and believe in the dreams of their community. HFLA wants to take a moment to praise and acknowledge all of the co-signers who have stepped up and believed in our loan recipients. All of these individuals did so much more than provide security for HFLA, they played an important role in helping build someone’s personal credit and ability to grow wealth.

HFLA understands that it can be a risk to co-sign for someone, but this risk can uplift, support, and grow one’s community, helping our neighbors achieve their sueñitas.

As the plot of In the Heights unfolds (and I will try to not give too much away) Vanessa’s friend finds her rejected rental application. He takes it to Vanessa’s boss to ask her to co-sign, which she does. This allows Vanessa to live her sueñita, and get her dream apartment downtown.

Our Advice: Know What is in Your Credit Report!

Check out these tips from HFLA Program Director, Brady Gasser.

Find more tips at Nerd Wallet.

1. Know what is in your report and how it affects you.

2. Know immediate actions that you can take.

  • Pay down revolving accounts if possible (i.e. credit cards).
  • Pay off derogatory accounts if possible (i.e. collections, charge-offs).
  • Check for accuracy and report disputes when appropriate.

3. Know what habits you need to instill over the long-term.

  • Make on time payments.
  • Keep overall credit utilization low.
  • Be careful about taking on debt and look for alternatives.