Has Your Credit Score Dropped This Recession?

Has Your Credit Score Dropped This Recession?

You’re not alone. More Americans than ever have credit scores marking them as “subprime” and fewer have ratings of 750 or over, considered premium ratings. This drop in credit ratings has coincided with the recession we’ve been dealing with for the past two years. High relative unemployment has contributed to credit problems for many Americans.

What does that mean for you? Well, as you can imagine, this makes it harder for you to secure loans from banks, be it for a car, home, business venture, or anything else. If you can get a loan, it will probably be more expensive than someone with better credit, meaning a higher interest rate for repayment. Recessions also mean that banks tend to engage in a practice known as credit rationing. This means they are much more cautious regarding lending to anyone, only extending credit to the best-rated individuals and businesses.

We all know having a high credit score benefits. But how can you get back there, so even you can get the loan you need in this market? Follow our steps to improving your credit. If credit card debt is what’s keeping your score down, you can read our guide on whether or not consolidating your debt is advantageous.