If you haven’t checked your credit score in awhile, you could be in for a shock.
According a report by the Associated Press, millions of U.S. borrowers have experienced significant declines in their FICO scores — the grading system most banks use in their lending decisions — amid high unemployment and limited access to credit. That scoring shift means many borrowers will find it increasingly difficult to qualify for affordable mortgages, auto loans and credit cards. “Millions more people will pay more over the next several years for credit,” says Gail Hillebrand, financial services campaign manager with nonprofit Consumers Union in San Francisco.
But credit scores aren’t only moving lower. The FICO data shows an increasing number of borrowers on the fringes of its scoring range, which runs from 300 to 850, with fewer borrowers in the middle of that range.
Of all the commentary I’ve read on the new credit card law I think this cartoon by Joe Heller of the Green Bay Press-Gazette is my favorite.