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Up the Financial Ladder, One Step at a Time

By his own admission, Marcellous Riley was no choir boy. As a kid growing up on Chicago’s South Side, near Wendell Phillips High School, he got in trouble - gangbanging, drinking, drugs. The usual. Spent time in Cook County jail as a consequence, though he was never convicted of a crime. For a while he was homeless.

Marcellous Riley can attest to the value of his experience working with financial and employment counselors at the Safer Foundation's Centers for Working Families

Photos by Gordon Walek

A new beginning

But that was long ago. Riley, 56, a gentle giant of a man whose demeanor and manners are at odds with his description of a troubled youth, reflected on his past following a recent ceremony in the Safer Foundation’s West Loop offices. Riley and others were there to be saluted for making “significant financial accomplishments” – thanks to their engagement with Safer’s Centers for Working Families, which provides financial coaching, income support services and job placement assistance, typically to people who’ve been behind bars.

For that population – and many others these days – “significant financial accomplishments” can amount to establishing a good credit score, or getting a job, or figuring out how to reduce medical collection debt. It can amount to getting a little earned income and learning how to manage it.

Riley, working with Safer financial coach Fred Stupen, did all that. And more. When directed to Safer in 2005, he had a poor credit score, no bank account, and seemingly limited prospects. But Riley had some things going for him, too. He’d been clean for a few years, had a hunger for work, and was willing to do whatever it took to become a productive member of society. Having a strong, and recently discovered, religious faith, he said, didn’t hurt.

It’s about more than jobs

Getting a job, said Stupen, is perceived as the number one priority for many of Safer’s clients. And for good reason, right? But that, he says, is only half the battle. “We want that initial success – getting a job – to keep you going,” he said. Just because you have a job, doesn’t mean you can meet all your expenses.

Fred Stupen, a financial counselor/coach at Safer's CWF, helped show Riley the ropes of money management and improving his credit score.

And that’s where LISC Chicago’s network of Centers for Working Families, of which Safer is one, plays a critical role. In addition to helping people find jobs, they help them identify public benefits they may be eligible for. And they provide financial counseling, so people will have a better understanding of how to manage the little money they do have. And, perhaps most important, they help people establish credit scores, about which Ricki Lowitz, LISC Chicago’s director of Centers for Working Families, speaks with the verve of an evangelist.

“People with poor or low credit scores always pay more for things," she told the Safer crowd. "Their car insurance premiums are higher, their access to checking and savings accounts is limited, and they have to leave security deposits to access cell phones and utilities - unlike people with good credit scores. Being poor isn't the entire problem. It’s having bad credit. Or no credit.”

Credit scores

Forty-six percent of CWF clients have no credit score, she said, even those who are excellent money managers. They may be borrowing money and paying it back on time, but they’re not borrowing from people who report those transactions to the credit bureaus.

“The only sure-fire way to generate a credit score,” she said, “is to have a credit card or a loan from a company that reports the payments. If your loan payments to a car dealer on Western Avenue aren’t reported, it won’t be reflected on your credit report. But if you default on the loan, and it goes to collection, that’ll get reported.”

"That's what a credit score is - a statement of whether or not you've paid your bills." -Ricki Lowitz, LISC Chicago director of Centers for Working Families

What the car dealer on Western Avenue wants to know, she said, is whether you’ll pay him back. “It doesn’t matter if you’re black, white, brown or foreign speaking,” said Lowitz. “And that’s what a credit score is – a statement of whether or not you've paid your bills."

The value of a good credit score goes way beyond borrowing to buy a car or a refrigerator. The score is society's measure of one’s value and dependability. “Car insurance rates are determined in part by your credit score,” said Lowitz. “Want to rent an apartment? The landlord will check your credit score. Sixty percent of employers will check your credit score.”

Twin Accounts

So how do CWFs help clients like Marcellous Riley establish a good credit score? One way is through the Twin Accounts program, which establishes clients as dependable borrowers. Here’s how it works. Participants are issued a 12-month, $300 loan, which is kept by the bank or credit union in a “locked” savings account until the loan is fully paid via monthly loan payments. Those payments are reported to the major credit bureaus that issue credit reports.

Not only does Twin Accounts help build the client’s credit, it provides an incentive to pay the loan on time. For each on-time monthly payment, the client will earn a dollar-for-dollar match which they can access at the end of the loan term. By that time, the client will have a credit history of monthly loan payments, the original $300 in savings and $300 more in matched funds. Clients agree up front to use their match/savings to get a secured credit card and continue to build credit (the secured card is also accessed through the CWF).

Ricki Lowitz, LISC Chicago's director of Centers for Working Families, is a huge proponent of the benefit of having high credit scores.

Incidentally, Lowitz, Stupen and others are fully aware of the responsibilities that come with having a credit card. But they see them as significant financial tools. If, for example, your car breaks down on the way to work, having a credit card will make it easier to get someone to promptly fix it. And while credit card interest rates are high, they’re usually less than Payday loans

Working his way up

But back to Marcellous Riley, whose experience at Safer’s CWF is emblematic of how a tough beginning can come to a good end. In addition to the financial counseling he received, he also got jobs working as a temp, including one at a packaging firm in Franklin Park, where he learned to clean machines on the production line. He parlayed that into a similar packaging job at Kettle Foods, the potato chip-maker, in Beloit, Wisc. After six weeks, he became a permanent employee and has since been promoted to maintaining the production machinery, thanks in part to skills he developed at the Franklin Park gig.

“In Wisconsin, you need to take a job readiness certification exam,” he said. “I aced it, thanks to the training I got at Safer.”

Marcellous Riley and his wife, Tijuanna.

Riley’s aced a few other things, too. A year ago, he married Tijuanna, his girlfriend of four years, whom he met on a Valentine’s Day when he picked up a prescription at a CVS drugstore in Chicago. Tijuanna was a lab technician there. She’s since transferred to a CVS in Janesville, Wisc., not far from Beloit. And Riley has moved his mother and 10-year-old niece from Chicago to Wisconsin to be near him and his wife.

“Life is good,” he said. ”We have good jobs and a nice apartment.” But it’s not perfect. They’d like to buy a house. And Riley is talking with his Safer CWF counselor Fred Stupen about how he might do that. 

Posted in Financial Opportunities

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Local Initiatives Support Corporation Chicago connects neighborhoods to the resources they need to become stronger and healthier.

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