Wednesday, May 27, 2009

Struggling Consumers See Credit Scores Drop Due to Recession

As Americans are losing their jobs and struggling to pay their bills, their credit scores are also taking a hit. USA TODAY is reporting that "from the third quarter of 2008 to the first quarter of 2009 — the latest data available — the average TransUnion credit score dropped 6 points to 651, the credit bureau says. Scores fell more dramatically in states hardest hit by the housing bust: California saw a 10-point drop, for example, and Arizona, 11."

The article also reports that "foreclosures also are ruining credit. But in general, credit card problems take a greater toll on overall scores than mortgage woes. That's because only 50.6 million households have first mortgages, while nearly all of the nation's 114 million households have at least one credit card, says Mark Zandi, chief economist at Moody's

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