The most recent recession was absolutely crippling for many people.
Now, some positive new numbers show that things are finally looking up for the millions of people hit hardest by the economic downturn.
Credit scores reached a record high this spring, according to data from Fair Isaac Corp. (FICO), which shared its figures with the Wall Street Journal. The average U.S. credit score reached 700 in April, the highest it’s been since 2005, when Fair Isaac Corp. started tracking the data.
Beyond that, more than 6 million Americans will see personal bankruptcies disappear in the next five years. The number of people with a low credit score—one below 600—declined to a record low of 40 million.
More Credit Available
What does this mean? As time passes, negative items fall off your credit report, which can help boost your credit score.
More Americans are finally able to get their lives back in order, financially speaking, following the recession. Your credit score determines how much money banks will lend you—the higher the score, the more money you’ll likely be able to borrow. A higher score typically also means a lower interest rate. This will make it easier for many Americans to buy a house, open up a new credit card or buy a car.
Personal bankruptcies can stay on your credit report for seven to 10 years, while mortgage foreclosures can stay on your credit report for up to seven years.
Foreclosures peaked in 2009, when 2.1 million people were foreclosed on, while Chapter 7 personal bankruptcies reached 1.1 million in 2010.
Want to know your credit score? These credit card companies offer free access to your score.