In three states of the US, particularly Michigan, Louisiana, and Missouri, consumers have seen their credit scores drop to more than 5 points, a recent credit climate study shows. The impact this has on the nation’s credit scores is that the average credit score which had always been several points above 670 has seen a dive to 669. This is the first time that in twelve months that average national credit score has dropped to below 670.
The blame should not be put on the three afore-mentioned states. If anything, attention should be given to Denver and New York, whose debt has yet again increased both by more than two percent. At the beginning of 2010, both these states were observed as charging huge amounts on their credit cards.
Miami MSA cannot escape the credit observation radar as well – consumers in this state scored, on average, at 654 – fifteen points less than the national average.
With these reports, consumers are warned yet again of the responsibilities entailed by owning credit cards and of the consequences of not rising up to such responsibilities. Credit score advisers say that the nation’s practice of staying in debt will have adverse future effects.
Moreover, it may not be the consumers’ sole fault. Experts warn consumers of programs or loans – some of which are government pioneered – that reduce consumers’ scores by a whopping 100 points. Obama’s new administration see to have not worked the kinks out yet in this regard, angering thousands of consumers who have seen their scores suddenly plummet by simply applying for “Making Home Affordable” program, a government mortgage aid. Of course, consumers with already defective credit histories definitely had problems, but the issue is the fact that consumers with clear histories applying for the loan saw their credit scores reduced.
On the other hand, the nation’s credit score state is not at all bleak. As the year started, Kentucky, Oregon, Missouri and West Virginia paid their credit debt by more than five percent. And nationally, consumers paid down their debts by more than two percent.
Vice President of Scoring Solutions Tom Quinn, on the issue of government mortgages as mentioned earlier, reminds consumers that to remedy their problems of low scores, consumers will have to rebuild their credit, pay on time any existing bills, and to use credit wisely.
Seems like a simple proposition, however, consumers still sometimes fall short of these requirements. Some consumers have thought of not having any credit cards at all. Unfortunately, they found out that in this country where credit is necessary for one to go places, it seems to be out of the question. The remaining choice, therefore, is to stick to maintaining one’s credit history.
