Americans are bringing their credit scores up as foreclosures and bankruptcies begin to drop off of credit reports and the country gets back on its economic feet post recession.
According to the Wall Street Journal, a recent Barclays BCS -2.09% PLC report stated that “more than six million U.S. adults will have personal bankruptcies disappear over the next five years,” which will have a positive effect on consumers’ credit scores.
“Higher scores lead to more available credit,” said Cris deRitis, senior director in the economics group at Moody’s Analytics. “We’d see more activity in terms of loan approvals and credit-card approvals, more spending and that would have a ripple effect across the economy, increasing aggregate demand for goods and services.”
The average credit score nationwide hit 700 in April, gaining one point since last fall. New research from FICO credit score creator Fair Isaac Corp. showed that this hasn’t happened since they began tracking credit data in 2005.
At the same time, those with credit scores under 600 are becoming fewer. Fair Isaac reports that number at an all-time low of only 20%, which has come down from 20.5% in October and a peak of 25.5% in 2010.
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