Americans’ Credit Score Sink
Steven L. Taylor
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Monday, July 12, 2010
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1 comment
More bad economic news via the AP: More Americans’ credit scores sink to new lows.
Figures provided by FICO Inc. show that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.
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.
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored
A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog).
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A little while back I saw this report “Consumer Credit Plunge Continues” and asked “Is there clear data to what extent this represents charge-offs, rather than a decline in new credit?”
http://timiacono.com/index.php/2010/07/09/consumer-credit-continues-to-decline/
This decline in credit scores implies it is happening at the low end, and probably entails a lot of charge-offs. Maybe higher end consumers can increase spending for a recovery …