Low Credit Scores Still Hold Back Many Americans

Few can qualify for best rates on mortgages and car loans, according to ACCC poll. 2 in 5 surveyed have sub-prime credit. Large numbers don’t know their score at all.

Boston, MA – April 2, 2012

Low Credit ScoresAmerican consumers still reeling from a lingering economic slowdown are being held back by low credit scores that can complicate their financial lives, according to a recent survey by American Consumer Credit Counseling. Nearly 40 percent of those surveyed reported scores below 620 – generally considered the cut-off point for sub-prime credit and high interest rates. More than 20 percent have scores below 580 – making it difficult or impossible to qualify for a mortgage, car loan and many credit cards.

Of 819 consumers surveyed in the recent ACCC web poll at ConsumerCredit.com, just 18 percent reported credit scores above 700.  Banks, mortgage companies and other credit issuers typically reserve the best rates and deals for consumers with credit scores above 720.

About a quarter of those surveyed fell into the score range of 620-699 – suggesting that with some focus and diligence they are in position to improve those numbers through better financial management and budgeting practices.

“Nearly four years of economic sluggishness has taken a toll on people’s household finances, and it shows in their credit scores,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, Mass.  “Banks are lending again. Mortgages are being underwritten. And the auto industry is eager to get people into new cars. But the lending standards are tougher than ever, so having a clean financial profile and a good credit score is critical.”

Surprisingly, 17 percent of all those polled by ACCC said they don’t even know what their score is. And when viewed regionally, the data is even more alarming. Of those responding to the poll from the Northeast (the largest geographical sample in the survey) a full 34 percent said they don’t know their score. A similar percentage from the South reported not knowing their scores, while respondents in the Midwest and West were generally more aware of their credit profiles.

“We were surprised that so many people in this region of the United States simply have no idea what their credit score is,” Trumble said. “That’s like running your financial life with a blindfold on. There are plenty of resources to help you understand your credit score – and the best ones are absolutely free.”

All consumers are entitled to a free annual copy of their credit report from the three major credit bureaus – Experian, Trans-Union and Equifax. To request this report and get more information, visit AnnualCreditReport.com.

The credit score poll was the latest in a series of ACCC web surveys for 2012 that focus on a variety of financial education, budgeting and planning topics. American Consumer Credit Counseling’s certified and experienced counselors offer a variety of financial education, counseling and debt management services to help consumers achieve long-term financial health and stability.

ACCC is a 501(c)3 organization, that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

  • For credit counseling, call 800-769-3571
  • For bankruptcy counseling. call 866-826-6924
  • For housing counseling, call 866-826-7180
  • For more information on financial education workshops in New England, call 800-769-3571 x708
  • Or visit us online at ConsumerCredit.com

About American Consumer Credit Counseling

American Consumer Credit Counseling (ACCC) is a non-profit 501(c)(3) organization dedicated to empowering consumers to achieve financial health through education, counseling, and debt management. ACCC provides individuals with practical solutions for solving financial problems and recognizes that consumers’ financial difficulties are often not the result of poor spending habits, but more frequently from extenuating circumstances beyond their control. As one of the nation’s leading providers of financial education and credit counseling services, ACCC works with consumers to help them with the best plan of action to reduce their debt and regain financial stability. ACCC is accredited by the Better Business Bureau and holds an A+ rating. It is also a member of the Association of Independent Consumer Credit Counseling Agencies. For more information or to access free financial education resources log on to ConsumerCredit.com or visit TalkingCentsBlog.com.