Americans Credit Scores Terrible

Well, it seems that we just can’t seem to get away from the never ending, yet somehow also see-sawing waves of bad news about the American economy, our way of life being threatened, and generally just dismal financial news about how far we’ve come as a nation. Or more like, how far we’ve back pedaled in the past 2-3 years is more like it.

We keep hearing different news about the housing market, mortgage interest rates, the stock market, people losing money in their retirement accounts, the job market, and more. Now, we’re hearing about how the threat of global markets may derail our already fragile recovery. Fabulous! Let’s order a bottle of wine around the table, right?

Not exactly. There’s even more bad news. Apparently, Americans are suffering some of the worst credit they’ve ever had. That means that you, me and the guy next door are probably showing the worst credit scores we have in several years, thanks to a combination of events. Joblessness, house abandonment, you name it.

Now, are you ready to the really depressing data? Somewhere right around one fourth of the American population right now are considered poor credit risks. What this means is that creditors may not even consider 1/4 of the population right now for general loans, mortgage loans, or heck even credit cards.

This is especially rough right now because creditors are also much more stringent about who they select money to, thanks to getting burned to the tune of billions of dollars on everything from credit cards to abandoned mortgages. Oh, no sir, they are not going to lend to you unless your credit is pretty much golden these days. And golden it most certainly is not for the majority of us.

Conversely, the amount of people on the higher upper spectrum of the credit chart has actually increased, if that makes any sense. So now we have a bigger imbalance. We need to tip the scales a little more in favor of “ok credit”, and then we’ll be even more on our way to a true sustained credit recovery.