Check out these results from FICO on July 19, 2010. The results compare the last two years from May 2008 to May 2010:
- The number of people with 500-599 scores increased by +10.06%
- The number of people with 600-699 scores decreased by -1.38%
- The number of people with 700-799 scores decreased by -5.62%
- The number of people with 800-850 scores decreased by -4.28%
Lower credit scores could mean that fewer people are being approved for loans with the best interest rates or being approved at all. The best scores which are the 700-850 scores are showing a sizable decrease of -9.90%. Consider for a moment that in the last 2 years only 9 of 10 people who had excellent credit scores then...still have those excellent scores.
There are more than 2.8 million people who have dropped out of the excellent credit score range and into the average credit score range. The main focus of CBF Institute is to educate consumers on how to "protect" or "increase" credit scores. We have books, dvds, workbooks, and reports that can help people. Check out the PRODUCTS section of our website.
The increase in BAD credit scores (those in the 500's) is concerning because people in the 500 range on credit scores generally cannot get traditional financing at all. The economy needs these people to buy products, cars, appliances, and homes. In two years, the number of consumers in the 500 credit score range grew by 1.7 million.
The impact of now having 18.6 million people in the 500 credit score range and those consumers not being unable to qualify for mortgages, car loans, student loans and credit cards could cause the sales of products and services to drop. This means companies make less money and build fewer products. Less people are needed to operate the stores and customer service counters, to build products, etc....resulting in layoffs of workers. The negative spiral is difficult to stop once started.
Credit Scores are a key engine to the U.S. economy.