More consumers are seeing their credit scores drop off this year.
According to a report from the AP, which cited new statistics provided by FICO, 25.5 percent of Americans – about 43.4 million – have a credit score below 600, meaning lenders view them as a risk, leaving them unable to qualify for credit cards, auto loans and mortgages. Over the last two years, the number of people in the lowest credit score category increased by about 2.4 million.
The report also said that this trend is likely to get worse before it gets better due to millions of unemployed Americans going longer without full-time work. Millions more face foreclosure, which can lower a credit score by 150 points. An ugly credit report takes considerably longer to repair than it does to ruin.
A new report from Fox Business said that new changes in lending laws are designed to help consumers out a bit, but that they will also force lenders to tighten their restrictions even more, locking out larger numbers of Americans.