The credit scores of millions more Americans are sinking to new lows.
Figures provided by FICO show that 25.5% of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It's unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.
This summer, FICO is providing free to teachers an interactive CD-ROM disk about FICO credit scores, designed for use in a classroom environment. The 30-minute narrative pauses frequently to allow the teacher to comment or answer questions. While the intended audience is adults who already have a little credit experience, the content may also be of interest to college and high school students. Titled Understanding Your FICO Score, the CD-ROM explains FICO scores and credit reports. It uses consumer examples to illustrate how scores work and how people can manage their scores. It also addresses common myths about credit scores and includes a short FAQ at the end. Any interested teacher can receive the CD-ROM free of charge (while supplies last) by sending us an email at the address below. Please include your U.S. mailing address and the age level of your students.... More
Experian®, the global information services company, released its findings today on average debt* per consumer in the top 20 major U.S. metropolitan areas. Approximately 65 percent of these areas exceeded the national average consumer debt, which was $24,775 in March.... More
The Internal Revenue Service today announced that starting with next year’s tax filing season it will no longer provide tax preparers and associated financial institutions with the “debt indicator,” which is used to facilitate refund anticipation loans (RALs). “As we prepare for tax season every year, we look at past practices and consider whether they still make sense. We no longer see a need for the debt indicator in a world where we can process a tax return and deliver a refund in 10 days,” IRS Commissioner Doug Shulman said. “We encourage taxpayers to use e-file with direct deposit so they can get their refunds in just a few days.”... More
Never has the need for financial education been stronger. Every year payday lenders strip $4.2 billion in excessive fees from Americans who think they are getting a two-week loan and end up trapped in debt. The typical payday borrower pays back a staggering $793 for a $325 loan. Together the un-banked and under-banked community makes up a whopping 84 million consumers in the United States. That’s almost the size of the entire credit union movement’s membership.... More
Bad financial habits start early. 8-21 year olds have annual incomes totaling $211 billion, most of which they spend rather than save. Children ages 4-12 spend nearly $30 billion each year on junk food, candy and games.... More
In Filene’s final CU Tomorrow brief we invite
Anya Kamenetz, a staff writer at Fast Company magazine and the author of Generation Debt, to address the question: How can credit unions better serve young adults?... More