Impact of Decreasing Credit Scores on Consumers

SOURCE www.cnbc.com
The national average credit score has dropped to 717 from 718, the first decrease in a decade. Factors contributing to this decline include higher debt levels, increased credit card balances, and missed payments. Savings rates have trended down, affecting consumers' ability to manage credit obligations. Maintaining a good credit score is crucial for loan approval and lower interest rates.

Key Points

  • National average credit score dropped to 717 from 718, the first decline in over a decade.
  • Factors include higher debt, increased credit card balances, and missed payments.
  • Maintaining a good credit score is crucial for loan approval and lower interest rates.

Pros

  • Higher credit scores increase chances of loan approval with lower interest rates.
  • Good credit score (above 670) indicates creditworthiness and better rates from lenders.

Cons

  • Lower credit scores lead to higher interest rates and reduced chances of loan approval.
  • Increased debt levels and credit card balances contribute to declining credit scores.