Does Credit Score Affect Adoption?

Credit Scores And Adoption

A new study finds that credit scores may be a key barrier to adoption in rural areas.

Researchers have long known that income plays a major role in adoption. For example, people in poverty are often less likely to adopt than those who can afford to take on extra costs like child care, medical bills, and housing. However, a new study by researchers at the University of Illinois shows that credit scores may also play a role.

In the study, researchers looked at adoption data collected by the National Center for Health Statistics and compared it to credit score data provided by Experian. They found that there is a relationship between credit scores and adoption. Specifically, higher credit scores meant fewer adopters. In other words, people with lower credit scores were more likely to adopt than people with higher scores. The researchers then identified three reasons why this might occur.

First, people with poor credit are less likely to receive loans and credit cards, so they are less able to afford to adopt. Second, they are more likely to be denied for loans and credit cards, so they may be less willing to adopt. Third, poor credit can make it more difficult to build a savings buffer, so it may be harder to save money for adoption.

The study also suggests that the association between credit scores and adoption may vary depending on where the adopter lives. For example, the researchers found that adoption rates were highest in states with the lowest credit scores, like North Dakota, West Virginia, and Alaska. These states tend to have large rural populations, and credit scores may be especially important in rural areas. The study also showed that states with the lowest credit scores and the largest rural populations, like Kentucky, Alabama, and Georgia, tended to have the highest adoption rates.

According to the researchers, it's possible that credit scores could play a bigger role in adoption in rural areas. They suggest that credit scores should be considered when designing policies that aim to encourage adoption. For example, financial incentives or subsidies could be offered to people with low credit scores. The researchers also note that the current adoption system relies heavily on volunteer foster parents. This means that the system is particularly sensitive to the cost of adopting, and it's possible that incentives could encourage people with lower credit scores to become foster parents.