I'm not-low all the time
- Jan 2, 2006
- Reaction score
- lincoln park
- Political Leaning
The rest of the article can be found here.U.S. consumers have tightened their belts to the point where they could take on a lot more debt if they wanted it.
But they don't.
The average credit score rose to 704 in July, a level not seen since the first quarter of 1998, according to data that Equifax [EFX 30.20 --- UNCH (0) ], one of the largest U.S. credit bureaus, provided exclusively to Reuters.
That means lenders consider consumers to be improved credit risks and would be happy to have more of them as customers. Yet many consumers still seem to find debt too risky, said Dann Adams, an Equifax executive.
"Traditionally, what you see is after a recession is that consumers are the engine on the locomotive for economic growth," Adams said. "Now it looks like they're the caboose."
The data is based on Equifax' 200 million-plus files of U.S. consumers using credit. The credit risk score forecasts the likelihood a consumer will fall 90 days or more behind on debt within two years, with 850 the highest score. The higher the score, the less likely a borrower will fall behind on debt.
I liken this as a positive for the future growth outlook (not to be confused with the immediate future). A more deleveraged US consumer will be stimulative in their (our) own right just as we witness global stimulus to be waning. I would like to bring attention to the difference between the last time credit scores reached this point, during one of the greatest economic expansions in world history, and this period.