Advocacy Study Finds No Direct Link between Credit Score and Discrimination

Release Date: 
Wednesday, January 29, 2014 - 5:00am
Release Number: 
Elle Patout

For Release: January 29, 2014                                                                                                                    

SBA Number: 14-01 ADV                                                                               

Contact: Elle Patout


Advocacy Study Finds No Direct Link between Credit Score and Discrimination

Supplemental issue brief revisits other potential reasons for disparity in access to capital. 


WASHINGTON – Today, the Office of Advocacy, an independent office within the Small Business Administration, released a report entitled, Credit Scores and Credit Market Outcomes: Evidence from the Survey of Small Business Finances and the Kauffman Firm Survey.  The report analyzes what factors, including business credit scores, may explain credit approvals or denials for small businesses. In addition, the report questions what role business credit scores might play in the credit outcomes of women- and minority-owned small businesses.

            Alongside today’s report, the Office of Advocacy released, Access to Capital for Women-and Minority-owned Businesses: Revisiting Key Variables, an issue brief discussing the struggle to access capital for certain business owner demographics and opportunities for additional data collection and analyses. 

Highlights of today’s report include:

  • The study did not find evidence that credit scores were used disproportionately in making credit determinations for either female-owned or minority-owned firms, relative to male-owned or non-minority-owned firms.

  • Regarding general access to credit, the study finds that small firms with lower credit scores are: (i) more likely to need additional credit because their credit needs have not already been met by past borrowings; (ii) more likely to be discouraged from applying for credit when they report a need for additional credit; and (iii) more likely to be denied credit when they need additional credit and apply for credit.

  • Firm-lender relationships play a significant role in credit outcomes for small firms, and there is no evidence that credit scores reduce the importance of firm-lender relationships.

Issue Brief recommends areas of further study including:

  • Closer examination of other established relevant factors such as credit indicators, personal wealth, and social capital, and 

  • More timely, periodic, and granular data to capture some other factor(s) significant to loan denial outcomes.

The full report is available on the Office of Advocacy website at and the issue brief is available at

Background:  The study uses data from the Federal Reserve Board’s Surveys of Small Business Finances (SSBF) and from the Kauffman Foundation’s Kauffman Firm Survey (KFS). 


The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed and Senate confirmed Chief Counsel for Advocacy advances the views, concerns and interests of small business before Congress, the White House, federal agencies, federal courts and policymakers. Regional advocates and an office in Washington, D.C., support the Chief Counsel’s efforts. For more information, visit, call (202) 205-6533 or get updates on Twitter (@AdvocacySBA) or Facebook at  

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