Report shows growing number with poor credit - Trade Only Today

Report shows growing number with poor credit

Author:
Publish date:

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.

"I don't get paid for loan applications; I get paid for closings," Ritch Workman, a Melbourne, Fla., mortgage broker, told the Associated Press. "I have plenty of business, but I'm struggling to stay open."

FICO's latest analysis is based on consumer credit reports as of April. Its findings represent an increase of about 2.4 million people in the lowest credit score categories in the last two years.

Before the Great Recession, scores on FICO's 300-to-850 scale weren't as volatile, said Andrew Jennings, chief research officer for FICO in Minneapolis. Historically, just 15 percent of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on Myfico.com.

More are likely to join their ranks, the article states. It can take several months before payment missteps actually drive down a credit score.

The Labor Department says about 26 million people are out of work or underemployed, and millions more face foreclosure, which alone can cut 150 points off an individual's score.

Click here for the full article.

Related

VIDEO: IBEX Interviews

Trade Only Today talks with Ron Huibers of Volvo Penta of the Americas, Huw Bower of the Brunswick Boat Group, Don Hopkins and Bill Szekesy of QMI Group, and Brad Burton of Albin Pump Marine LLC.