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25% of consumers’ population with low credit scores – why it is alarming

By Brian Anderson
Published: Sunday, November 14th, 2010

11According to the recent analysis performed by FICO as many as 43.3 million people are now falling into the category of lowest credit score holders. This is 2.4 million people more from the past two years. The score of 599 and lower is becoming more common to consumers and this is not a good sign neither for the consumers, lenders nor the economy itself.

With a poor credit standing people are narrowing their chances of getting credit cards, mortgage, car loans and the like. Now, based on the FICO findings, 25 percent of the consumer population is now facing such problems. This situation also is a problem for the lending companies. Now that more people are having poor credit standing, lenders cannot make more out of their lending business considering that lesser people can qualify to their set forth standards. Even the economy will be hit by this situation given that if lesser and lesser people are being able to spend, the flow of money in the system will slow down making the economy less stable.

What FICO has revealed is not a situation where one party advances over the other. It is more like a domino effect that influences the rest of the system in one way or another.

Most people rely on credit nowadays but keeping up must have been a hard part for most of them. Now when you present yourself before a credit card company, bank, financial institution or other lenders of specific product and service you do not make most of the talking for your credit history and your credit score can detail all the information needed by providers.

Today credit scores can tell a lot about how the consumers have been handling their finances for the past few years up to the present. This is how crucial these three-digit numbers are nowadays. Consumers’ scores can really open doors of opportunity however it can also take away chances from their hands. It will all depend on how hard they have been working to raise their points by avoiding credit mistakes.

The figures reported by FICO are alarming in a way that is asking consumers to do something. Experts would suggest consumers must aim for a better score today more than ever. There are several ways on how to escape from this dire situation and that is through some serious working out with raising your credit score.

There is no greater force that can directly affect a consumer’s credit score but him/her thus he/she holds the key to make things happen.

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