According to a report by Barclay’s PLC shows that the national credit score has gotten higher, reaching 700 in April, marking the highest national credit score average since 2005. The report states that the reason behind this is that 6 million Americans will have bankruptcies removed from their credit scores within the next half decade.
“Americans credit scores notched a record high this spring in conjunction with a decline in the share of U.S. consumers that are deemed to be high-risk borrower,” The Wall Street Journal reports.
The rise of credit scores and improved risk pools for lenders is the likeliest cause behind the sudden surge, which is good news for the country.
With the economy’s renewed faith in the government and President Trump, and new jobs being added every day, we can expect more reports like this.
The Daily Caller has more:
Improving consumer outlooks, a falling unemployment rate and steady annual 2 percent economic growth will likely have lenders considering doling out more credit at cheaper costs, as consumers are more and more likely to pay back every dollar they borrowed with interest.
One aspect of the U.S. economy may cause banks and lending institutions to question whether offering more credit is a good idea: household debt.
U.S. household debt in the first quarter of 2017 topped levels reached during 2008’s Great Recession.
The total debt held by U.S. households grew to $12.73 trillion in the first three months of 2017, $50 billion above the previous peak in 2008, according to a report released in mid-May by the New York Federal Reserve Bank. The figure isn’t adjusted for inflation or population size.
Officials at the New York Fed said that while the figure is at historic levels, there is no reason to panic.
“This record debt level is neither a reason to celebrate nor a cause for alarm. But it does provide an opportune moment to consider debt performance,” research officer Donghoon Lee said in a statement. “While most delinquency flows have improved markedly since the Great Recession and remain low overall, there are divergent trends among debt types.”
As a share of the U.S. economy, household debt is still smaller than 2008 levels. Household debt is equivalent to 67 percent of the economy in 2017, compared to 85 percent in 2008.