It’s no surprise that people struggling to makes ends meet would wind up with a bad credit score after maybe maxing out their cards, missing a payment or landing in collections.
The Associated Press is reporting that FICO has stated that the credit scores for more and more people are sinking to new lows. The block of consumers that had a credit score of 599 or less has grown from 18% of the population with score to now 25%.
The article makes some great observations:
Because consumers relied so heavily on debt to fuel their spending in recent years, their restricted access to credit is one reason for the slow economic recovery.
On a broader scale, some of the spike in foreclosures came about because homeowners were financially irresponsible, while others lost their jobs and could no longer pay their mortgages. Yet both reasons for foreclosures have the same impact on a borrower’s FICO score.
You can read the full article here.