The Majority of Consumers Have Bad Credit Scores, report says…
The majority, or 56 percent, of consumers have subprime credit scores, according to a report released by the Corporation for Enterprise Development (CFED), a nonprofit that advocates for policy changes to help low and moderate-income households. As a result, these consumers are often locked out of the lending markets. And if they are borrowing, chances are they’re missing out on the lowest rates being offered to consumers with stronger credit.
“There are millions of Americans who are being excluded from the financial mainstream,” says Jennifer Brooks, director of state and local policy at CFED and lead author of the report. “They’re relegated to using fringe, often high cost financial products that trap them in a cycle of debt.”
Credit experts say the report is a reminder that even as many Americans are returning to work and earning steady paychecks for the first time in a while, repairing credit takes time. Late payments and delinquent accounts that are sent to collections, such as defaulted credit cards or a foreclosure, can stay on your credit report for up to seven years. Bankruptcy filings can stay on there for up to 10 years.
“In the world of consumer credit scoring, if you mess up, it’s a seven to 10 year penalty,” says John Ulzheimer, president of consumer education at CreditSeseme credit management Web site. Go to CreditSesame now and get started fixing your bad credit rating.