Credit Scores Drop Again

 
The economy is obviously not turning around just yet as can be evidenced by the latest drop in credit scores. Just as consumers started to think that they might be coming slowly out of the woods, new figures that have just been released by FICO shows that 25.5% of consumers are considered to be a bad risk to lenders. Adding these new clients to the old ones – 43.4% of all Americans now have a credit score that is 599 or lower, making it difficult for them to qualify for auto loans, mortgages, etc. This means that the economy is going to be hurt even more as consumers are not able to make those big purchases.
 
This is particularly scary for the auto loan industry as many felt that they might be able to get back on their feet soon. But with consumers unable to qualify for the auto loans, that means more cars that will not be purchased. This hurts the auto loan industry, but also the manufacturers as well. They are trying to move out old inventory so that they can get ready for the new cars to come in, but if they can’t they are left with two years worth of inventory and no buyers.
 
The auto loan industry is trying to move forward with their sales, but this is impossible if they cannot get the auto loans approved. FICO’s data also showed that there was an increase in the number of consumers that have prime credit scores of more than 800 – which is great for the auto loan industry, except that they do not make up the majority of those who purchase cars.

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