American Credit Scores Crash To New Lows
Planet Finance alerted readers of this blog that mortgage lenders were reporting forebearance, mortgage modifications and other help to the applicant’s credit bureaus. We warned that such practices would destroy consumer credit across the country. We even asked the Congressional Oversight Panel if they’d studied this and have a comment. They hadn’t.
Now there’s proof that consumer credit has taken a dive, which will take home buyers and retail consumers off the roles for years to come.
“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,” according to the AP.
While the above report cites walking away from mortgages and losing one’s job as reasons for poor credit scores, we standby our original contention that the very modifications by lenders, that taxpayers have subsidized, are a major cause for the errosion.
Read more: American Credit Scores Crash To New Lows – 24/7 Wall St. http://247wallst.com/2010/07/12/american-credit-scores-crash-to-new-lows/#ixzz0tTQK6xiL
American Credit Scores Crash To New Lows24/7 Wall St. (blog) – 2 hours ago
Either of those actions severely damages credit ratings. One of the long term effects of low credit scores is a likely long-term drop in consumer spending. …
More Americans’ credit scores sink to new lows
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