The Majority of
Consumers Have Subprime Credit Scores, Report Says
Approximately 56 percent of Americans are being held back by subprime credit scores, according to a new report from the Corporation for Enterprise Development. Many landed in that category during the housing bust and recession and are still trying to wipe away the black marks in their files. Financial blowback from defaults, foreclosure, or bankruptcy can last seven years to a decade. In the meantime, poor ratings are blocking consumers' access to traditional lending markets or, if they do qualify for financing, keeping them from obtaining the best rates on products. "There are millions of Americans who are being excluded from the financial mainstream," notes Jennifer Brooks, director of state and local policy at CFED. "They're relegated to using fringe, often high cost financial products that trap them in a cycle of debt." CFED analyzed TransUnion data based on the TransRisk score -- which ranges from 100 to 934, with any score below 700 deemed near prime or subprime. The organization acknowledges, however, that the TransRisk model is not the most common among the many different types of credit scores that lenders use.
From "The Majority of Consumers Have Subprime Credit Scores, Report Says"
Washington Post (01/29/15) Marte, Jonnelle
Approximately 56 percent of Americans are being held back by subprime credit scores, according to a new report from the Corporation for Enterprise Development. Many landed in that category during the housing bust and recession and are still trying to wipe away the black marks in their files. Financial blowback from defaults, foreclosure, or bankruptcy can last seven years to a decade. In the meantime, poor ratings are blocking consumers' access to traditional lending markets or, if they do qualify for financing, keeping them from obtaining the best rates on products. "There are millions of Americans who are being excluded from the financial mainstream," notes Jennifer Brooks, director of state and local policy at CFED. "They're relegated to using fringe, often high cost financial products that trap them in a cycle of debt." CFED analyzed TransUnion data based on the TransRisk score -- which ranges from 100 to 934, with any score below 700 deemed near prime or subprime. The organization acknowledges, however, that the TransRisk model is not the most common among the many different types of credit scores that lenders use.
From "The Majority of Consumers Have Subprime Credit Scores, Report Says"
Washington Post (01/29/15) Marte, Jonnelle
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