Here’s a bit of good news – 18.3% of all consumers are finally getting FICO scores in the 800 to 850 range. That’s the highest average level in this range of scores since the economy crashed in 2008.
Rachell Bells of the FICO lab attributes this trend to the redoubled efforts of consumers to keep their credit profiles clean and spotless. These are the folks who gave it their all to stay out of unmanageable debt during the crisis and have been rewarded with a nice, tidy credit score for their troubles.
But not everything is all nice and shiny when it comes to the other ranges.
Scores in the 700 to 749 range have stayed at the 15.5% mark, while consumers in the 750 to 799 range are still at 19.44%. People within these ranges of scores face loans low-value loans matched with higher interest rates – not a good combination when you want to take out a 15 to 20-year mortgage on a home.
Still, more than half of all American consumers have also managed to keep their credit scores decent – around 700 to 850 – during and immediately after the recession. This is a good sign that most of us didn’t plunge head-first into borrowing our way out of the crisis, even if there are some of us still struggling with debt right now.
What is worrying, though, is the looming student debt crisis.
Student loans don’t get expunged with bankruptcy, and they will stay there for decades on end – keeping you locked down if you don’t get a job that pays enough to match the bills. So while the FICO score of the average American may appear to be decent right now, we will still have to keep our eyes peeled on the long-term effects of $1 trillion in student debt.