U.S. Credit Scores Fall To New Lows

Data released on Monday showed that American consumer credit scores have sunken to new lows, amid a lending climate that is proving to be more restrictive to those not in good standing with creditors.

According to figures provided by FICO Inc., 25.5 percent of consumers or nearly 43.4 million Americans now have a credit score below 600.

A credit score at this level will mark these consumers as poor risks for lenders, making it unlikely that they will be able to receive credit cards, auto loans and mortgages, as banks continue to become more restrictive in terms of lending.

These low levels of credit scores are slowing the economic recovery, as consumers who used debt to back spending for the past several years, now do not have to face restricted credit access.

On the other end of the spectrum, more consumers actually have the top level of credit, which is 800 or above, showing that more Americans have pulled back on spending and paid down debt recently following the recession.

Currently 17.9 percent of Americans have a score of 800 or above, which is down from pre-recession levels of 18.7 percent, but ahead the 13 percent historical average.

The 11.9 percent of consumers that fall into the category of moderate credit, a range of 650 to 699, may be facing impacts of restricted credit, including having to pay higher interest rates to receive loans and credit cards.

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