On occasion, I am asked are things better or worse? When it comes to “credit things”  I think a higher percentage of people are trying to tackle their budgets by keeping their spending down to align more with their income realizing the tapping into their homes equity days are over, at least for the time being.  Many people are tackling any bad credit they may have incurred realizing that any costs of credit repair are a drop in the bucket compared to just letting any bad credit stay on their credit report for 7-10 years.

People are trying to be as responsible as possible to increase their credit scores because the reality is going down the road good credit is going to be necessary for any type of credit purchase from home ownership to low interest rate credit cards.  My hat is off to those working hard to maintain good credit or get out of the credit prison that low scores can bring.

There are many things as consumers we need to be aware of when it come to credit. Keeping an eye on what the “Bankers” say can be a forewarning of things to come. On the credit front according to Fitch Ratings credit card defaults fell to a 15 month low.  Michael Dean, a managing director at Fitch, tempered this welcome news by saying: “The trends are encouraging, but card defaults are still elevated historically and are expected to remain so.

FICO just released a report “US consumer Credit Risk” their trends and expectations for the 3rd qtr 2010. This report is a compilation of numerous banks and creditors both large and small.  Basically the survey covers 1) short term forecast for credit card delinquencies.  2) short term predictions for demand for consumer credit and the lending environment. 3) short term outlooks specifically for the existing customer credit balances and the level of charge offs from credit portfolios.

This FICO survey show a pretty grisly outlook coming for the next couple of quarters.  As a summary 53% of the respondents expect a rise in mortgage delinquency and only 14 % expect a decrease.  42% expect a rise in credit card delinquency, 49% an increase with student loans and 47% increase with small business loan delinquency.

With the vast majority of bankers expecting delinquency rates to increase or at best stay the same what does this mean to us Mr Joe Average consumer? Less access to credit and a tougher time getting it!  Yep, you can “bank” on it!!

This survey reports that 99% of the “Bankers” expect an increase or at minimum same scrutiny overall on risk management.  This simply put means they are going to watch their credit portfolios like a hawk!  It’s reported that 36% expect less credit to be granted and 39% expect the same credit as last qtr to be granted.   Overall 46% of all creditors expect approval criteria to get much tougher and 65% expect that when credit is granted a lower limit will be approved than in the past.

It’s just the way things are right now.  Like it or not credit scores are at the forefront of what we can do or not do.  If you’d like to get more information on how to increase your credit score just let us know.

Be Bold!