Chicago real estate, living and neighborhood perspective

Looking for Signs

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As the AP recently reported, figures provided by FICO Inc. show that 25.5% of consumers, nearly 43.4 million people, now have a credit score of 599 or below.  A notable shift also occurs in the moderate credit range of scores from 650-699, which compromise 11.9% of all scores, down from the historical average of 15%, a drop of approximately 5.3 million people.  People in the top bracket with scores of 800 and above have increased to 17.9%, above their historical average of 13%.

Even with today’s low rates, many aren’t able to qualify.  The biggest impact may be from those with mid-range scores.  They are the most likely to use lines of credits, and apply for mortgages and auto loans.  Tighter lending guidelines could mean less money returning to the market in the form of purchases, slowing the recovery process.  The current job market and tighter lending policies could also explain the shifts to the low / high credit brackets as many either can’t afford their lifestyle and miss payments, or tighten up their budget significantly and rely less on credit.

From recent 2010 Q1 data, other drivers of local supply and demand should be considered along with the current lending guidelines.

Sherwin is a REALTOR® in the Chicago & Suburban area with @properties. Questions can be forwarded to Sherwin Sucaldito

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”Looking for Signs” by Sherwin Sucaldito is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.
Based on a work at Realty Evolved

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