As the economy keeps improving since the last recession, American credit scores reached a record high. According to data from Fair Isaac Corp, the average credit score for U.S. consumers hit 700 in April on a range from 300 to 850.
As reported on The Wall Street Journal, more than six million U.S. adults will have their records clear of personal bankruptcies and foreclosures over the next five years. Dropping those negative events definitely helps boost consumers’ credit scores. As a result, economists expect a rise in loan and credit-card approvals and increased spending by consumers.
“Higher scores lead to more available credit,” Cristian de Ritis, senior director in the economics group at Moody’s Analytics, told The Wall Street Journal. “We’d see more activity in terms of loan approvals and credit-card approvals, more spending, and that would have a ripple effect across the economy, increasing aggregate demand for goods and services.”
Mortgage foreclosures stay on credit reports for up to seven years. Personal bankruptcies can remain on credit reports for seven to 10 years. Falling unemployment rate and continued economic growth are helping American consumers’ personal finance. Expect to see more improvement for American credit scores with the current positive outlooks.
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