Credit Scores at All Time Lows

According to the Associated Press (AP), the average credit score for Americans is at an all time low.  “Figures provided by FICO Inc. show that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use."

Historically, just 15 percent of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on Myfico.com.

The recession, tight lending practices by banks, and unemployment have caught up to the consumer credit market, and the trend is likely to worsen.  This will obviously have a negative impact on the traditional real estate market as fewer people will be able to qualify for a traditional loan.