Have you seen the news today? AP news posted this yesterday and TWBS daily broad casted it today.
Americans FICO scores show that 25%, nearly 43 million people have credit scores below 599. This marks them as a POOR RISK to lenders. It means no new credit cards, no new car loans, no new mortgage loans etc....
This latest analysis was reported in April of this year. It represents 2.4 million people in the lowest credit score categories in the past two years. It can take several months to drive a credit score down from many missteps. The Labor Department says about 26 million people are out of work or underemployed, and millions more face foreclosure, which alone can chop 150 points off an individuals score. Once the damage is done, it could be years before this group can restore their scores, even if they had strong credit histories in the past.
On a positive note, there have been a number of consumers that have a top score of 800 or more. Over the years they have cut spending and paid down debt.
Now a moderate credit score is 650-699. This group is significant because it may feel the effects of lenders' tighter credit standards the most, said FICO's Jennings. Consumers on the lowest end of the scale are less likely to try to borrow. However, people with mid-range scores that had been eligible for credit before the meltdown are looking to buy homes or cars but finding it hard to qualify for affordable loans.
It is said that some of the foreclosure hits have been due to the homeowners that were financially irresponsible, while others lost their jobs and could no longer pay their mortgage. YET BOTH HAVE THE SAME IMPACT.
Do you know how you stand??
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