Being one with low credit scores makes you one hurting the economic recovery

The U.S. has made credit a really significant part of the economy. The whole economy is apparently sinking along with all of the credit scores. It seems like individuals have given up on their debt as it is no longer being paid by most. This is circumstantial for numerous, such similar to a job loss. Numerous would rather have stopped paying than lose money into a home. Either way, these people face the challenge of living with bad credit. After the urgent relief of defaulting on debt, a long-term financial obstacle course lies ahead for them. Considering help won’t come from any of these people with poor credit, the recovery will take a lot longer. Source of article – Low credit scores may exclude millions from economic recovery by Personal Money Store.

Credit scores tend to be low

Hardly any person can get a mortgage, car loan, or credit card now and days. Typically, there is only 15 percent of individuals that fall under 600 with their FICO scores, reports the Christian Science Monitor. Now there are 25.5 percent of individuals with FICO scores below 600, as outlined by a recent FICO report. There is a fairly good chance based on one more dip in housing prices and continuing foreclosures along with unemployment that there will be more individuals going below 600 before there is any improvement.

Poor credit score means never getting to borrow

Only a quarter of all Americans could be able to get loans for things considering one in four has a credit score below 600. Loans could be received through Federal Housing Administration programs if your score is at least a 580. But none will qualify for loans guaranteed by Fannie Mae or Freddie Mac, which account for the lion’s share of the market and typically require credit scores of at least 650. Nobody could be getting auto loan application or credit cards either.

A bad credit score makes for a bad employee

For individuals who reneged on their debts because they lost their jobs, finding a new job can be tougher with a low credit score. CNN shows us that there are a lot more hiring managers checking credit before hiring a new employee. Missing any of your payments might just mean you won’t get a new job. According to a survey by the Society for Human Resource Management, 60 percent of employers are using job credit checks when filling at least some of their openings. Only 35 percent reported checking credit in a 2003 survey, and only about 13 percent did so 1996.

Years spent fixing credit

One thing people have done often lately is defaulted on loans; they would rather have the money than be putting it into something they do not need. But people thinking about following suit should know that the short term gain could have long-term consequences. A damaged credit score can take between 3 to 7 years to bring back to where it was. The recession credit is going to be especially hard to get out of for many Americans.

Discover more info on this subject

Christian Science Monitors

csmonitor.com/Money/new-economy/2010/0727/Credit-scores-slide-downward

Wall Street Journal

blogs.wsj.com/economics/2010/07/31/number-of-the-week-default-repercussions/

CNN Money

money.cnn.com/2010/07/22/news/economy/credit_checks_for_job_applicants/