Credit Scores Drop

I read a interesting/disturbing article this morning about credit scores dropping.  Take a read if you can: Credit Scores Take a Hit

The article is not focused on New Orleans citizens, but rather the nation as a whole.  It outlines how many individuals are seeing their credit scores drop...THROUGH NO FAULT OF THEIR OWN!!! People work so hard their entire lives to pay bills on time to keep their credit score high and now banks are causing their credit scores to fall.  What are the banks doing to cause this? The article outlines three reasons:

1. Cutting Credit Card Lines - Banks are systematically reducing the amount of credit they have on their books by cutting credit limits.  The article states that by the end of 2010, banks will have cut about half of all available credit.  Having less credit available can cause a consumer's credit score to fall.
2. New Credit Scoring - This scoring takes in to account the amount of available credit consumer's are using.  Combined with decreasing limits and a poor economy, this can also lead to a drop in credit scores.
3. Loan Modifications - Many consumers are modifying loans to be able to pay during these hard economic times.  Unfortunately, the way that the banks currently report these loan modifications to credit bureaus potentially can cause damage to your credit score.

Please take a look at the article for further explanation of this issue.  I know that this is a very frustrating situation but it reiterates the need for consumers to actively monitor their credit scores.

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This New Orleans real estate blog post was provided by Darryl Glade, Realtor with RE/MAX N.O. Properties. Darryl can be reached at darrylglade@remax.net or by phone at 504.451.8960. Darryl's office is conveniently located in Uptown New Orleans at 8001 Maple Street. Darryl works throughout the Greater New Orleans area including Uptown, Lakeview, Broadmoor, Mid-City, Metairie, Kenner, Westbank, French Quarter, and the Warehouse District.

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