Despite reports of the overall economic rebound, individual consumers aren’t feeling it. The credit scores of millions more Americans are sinking to new lows.
Figures provided by FICO to The Associated Press show that 25.5% of consumers, nearly 43.4 million people, now have a credit score of 599 or below, marking them as poor risks for lenders. As a result, according to AP, it’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.
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 past two years. Before the economic crisis, 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% of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on Myfico.com.