BURBANK, Calif.—Nearly three-quarters of Americans say the U.S. credit system is unfair, yet 53% also say they depend on credit for basic necessities like food and medicine, according to the America’s Economic Opportunity Gap Report from Zest AI, a provider of lending technology.
The dependency climbs to 75% among Gen Z and Millennials, “revealing that even an unfair system has become indispensable,” the company said.
According to ZestAI, “This distrust comes amid major shifts in the financial landscape. From updates in mortgage lending rules to the growing role of artificial intelligence in loan approvals, fraud detection, and credit scoring, Americans are navigating a system in flux – one that feels increasingly opaque and difficult to access.”
Credit is a Lifeline, and a Landmine
In releasing its findings, Zest AI said Americans’ reliance on credit has surged dramatically, with 65% using credit more over the past year – a prominent jump from just 27% who reported increasing their credit reliance in 2020.
“Despite this growing dependence, more than 1 in 4 (27%) Americans say it’s actually harder to access credit today than it was a year ago, creating a troubling squeeze,” the company stated.
Additional Findings
To manage day-to-day financial strain, Americans are also increasingly turning to alternative solutions like BNPL, with additional findings including”
- More Americans are turning to nontraditional sources, with increased use of buy now, pay later (23%) and borrowing from friends or family (17%) compared to a year ago.
- Among BNPL users, nearly half (49%) report using it to cover necessities like food, while 48% use it to avoid high-interest alternatives such as payday loans.
- Misunderstandings about credit impacts are common, with 63% reporting they don’t realize BNPL may affect their credit score, and nearly one-in-four believing it does not (22%).
Widespread Call for Change & AI Solutions
Zest AI said the survey also found that Americans are frustrated with legacy credit scoring methods, with 44% saying they feel the credit system is setting them up to fail, and 47% saying the current process of getting approved for credit is painfully too long.
“The survey also discovered how AI can be a game-changer in offering credit solutions that increase opportunity, stability, and fairness,” according to Zest AI.
It said the survey also found:
- 74% want AI to improve their banking experience.
- 41% Americans believe AI will drive positive impact and improve economic opportunities.
- 60% want mortgage lenders to consider alternative credit scoring models beyond FICO and VantageScore.
The research report, with additional data and analysis, “America’s Economic Opportunity Gap,” can be found here.
