Posts Tagged ‘credit score’

American Credit Scores: Another Casualty of the Great Recession

A full quarter of American consumers, 25.5%, now have credit scores of 599 or below, according to a recent sampling by FICO Inc.  People with scores this low are unlikely to qualify for any sort of consumer lending. They will be unable to get a credit card, buy a car, or a home.

As unemployment and foreclosures continue to plague the economy, more and more people will lose ground on this important metric for consumer lending. FICO expects the percentage of people with low credit scores will continue to rise in the near term, since credit reporting often lags behind late payments and the economy has gotten no better.

On the flip side, the percentage of consumers with scores of 800 and above has also increased over historic levels to 17.9%.  This means that anyone who has managed to hold on to his job and is still doing relatively well is being very cautious and paying down what he owes.

The effects of plummeting credit scores will be felt for years since banks have tightened lending standards recently. Even people with scores in the medium range of 650 to 699 will find it harder to obtain financing at a decent interest rate. Those with scores below that will be unable to find financing at any rate, and it will take years for them to recover what they’ve lost.

Related articles:

How To Rebuild Your Credit Rating

See Your FICO Score

Most Banks Lending Standards Remain Unchanged, Federal Reserve Report Shows

hand with credit card

 

The most recent Federal Reserve  quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices shows that most banks are maintaining the lending standards they have in place currently, while some banks have tightened these standards even further.

Banks tightened lending standards as a response to the economic downturn and the financial crisis that occurred in 2008. Banks appear to be maintaining these standards. Today, banks are requiring a higher minimum credit score  and are in general keeping credit limits lower than in the pre-crisis years.  The full report is available here.

Free Credit Reports: What You Need To Know

The CARD Act, the new law regulating credit card companies also sets forth  a new regulation  regarding companies that use free credit reports to entice people to enroll in paid services such as ordering credit scores, credit score monitoring, and identity theft protection services.

Basically, the new rule is this: anyone who provides free credit reports must let people know that they can obtain their government mandated annual credit report (three reports in total, one from each Credit Bureau) from AnnualCreditReport.com. This website has been established as the centralized location to allow people to obtain their credit reports for free.

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What Is A Good FICO Credit Score In 2010?

Your FICO score is one of the factors that lenders use to determine whether or not they will approve you for a credit card, auto loan or mortgage. Your credit score is also a factor in the amount of interest you will have to pay if you are offered a loan or credit. The higher your credit score is, the easier it is for you to qualify for credit cards and loans and the better terms you will get. FICO scores range from 300 to 850. Naturally, you might wonder what is a good FICO credit score?

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Understanding Your Credit Report Score

credit-score-1 Understanding your credit report score can sometimes be like trying to decipher ancient Egyptian hieroglyphics. Until recently, the score itself and the methods for calculating it were a complete secret.

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