Assessing Credit Consequences of Justice Involvement for Families: Estimating Improved Credit Scores from Reentry Programs

• In Event: From Credit Access to Debt Enforcement: Financial Vulnerability Across Systems

Abstract

Prior research identifies poor credit as a substantial financial challenge for justice-involved individuals, restricting access to mainstream financial services and creating additional barriers to employment and housing. Because family members frequently provide financial support during and after incarceration, these households may also experience weakened credit profiles, extending the economic consequences of incarceration beyond the individual directly affected. In response, many re-entry programs offer financial education or financial capability services, with the goal of improving financial decision-making and facilitating successful reintegration. However, there is limited causal or descriptive evidence on the extent of credit harm associated with incarceration or on the effectiveness of such interventions.

This study uses statewide administrative data to examine credit outcomes for justice-involved people and their families and to assess whether financial education delivered as part of the re-entry process is associated with improved financial outcomes. The primary research questions are: (1) How severe are credit challenges for justice-involved individuals and their family members before, during, and after incarceration? and (2) Are financial education or financial capability services provided during re-entry associated with improvements in credit scores, debt levels, or delinquency?

Using linked administrative records from 2015 to 2023, the study tracks credit scores, unsecured and secured debt balances, and delinquency indicators for approximately 50,000 individuals incarcerated in Wisconsin state facilities and roughly 120,000 individuals who resided at the same address prior to incarceration. Households affected by incarceration are identified using de-identified data from the Wisconsin Administrative Data Core, which allows outcomes to be observed longitudinally for both incarcerated individuals and their family members.

By documenting the magnitude and timing of credit disruptions associated with incarceration and evaluating the role of re-entry financial education, this research contributes new evidence to policy discussions on financial capability, household spillovers, and re-entry supports. The findings can inform more targeted, evidence-based re-entry strategies aimed at reducing financial hardship and promoting economic stability for justice-involved individuals and their families.

Author

• J. Michael C Collins, University of Wisconsin-Madison
  Presenting Author