Americans’ Credit Scores Dip to a Record Low
Americans’ credit scores are the latest victims of the current recession, a new report shows. More than a quarter of U.S. consumers had credit scores under 599 in April of this year, according to data released by FICO, the creator of the best-known and most widely used credit score model in the U.S. Such a score is likely to prevent consumers from getting credit cards, auto loans or mortgages in today’s lending environment.
FICO’s algorithm uses a credit score scale of 300 – 850. The under-599 group has expanded in April by 2.4 million people. More significantly, the percentage of consumers with FICO scores under 599 has jumped from a historical average of 15 percent to 25.5 percent in April, according to the report.
On the other side of the scale, the above-800 FICO score group has also expanded, the report revealed. FICO estimates that in April 17.9 percent of consumers have earned a credit score of 800 or more, up by more than a third from the historical average of 13 percent, but down from a high of 18.9 percent in April 2008.
In the middle of the range, 11.9 percent of consumers have been given scores of 650 – 699. This number is virtually unchanged from the 12 percent level registered in 2008, however it represents a significant drop from the historical average of 15 percent, roughly 5.3 million people.
(Via MyFico.com)
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