Share Responsibility

We’ve all heard the comments in the news. Some pundits blame the poor for our credit crisis. Others blame the banks for their predatory practices. The reality is that blame should be shared. Most people should recognize that there is something wrong with being offered loans

Sure, the lenders started making loans with little data. But, this wasn’t a overnight event. It was a slippery slope. First, they started not validating income, then they started not validating income. In the end, they were making what the industry calls Liar’s loans.

Once you’ve accepted that you have a role in your now tough loan, here’s what you can do:

• First, figure out what you can afford. There no reason to do snazzy refis to stay in a house you really can’t afford.
• Talk to your lender. If you are about to miss payments. Talk to them.
• Seek out a credit counselor. Check out our list of Dept. of Justice approved credit counseling agencies.

Here’s what NOT to do:

• Don’t seek your slate to be wiped clean. Look too many us want to just to be forgiven our debts saying things like “the big bad company can afford it”. Come on, don’t expect a free ride. Be happy to get some assistance
• Stay clear of those internet ads and late night TV ads you see. Most of these companies charge way more than they should – that’s why they can afford late night TV ads.

Credit Scores Rise in March 2009

Credit Karma announced the latest credit score trends for March 2009.  Highlights:

• 43% of consumer credit scores have gone up
• 27% have gone down
• 30% remained the same

This is happening despite the credit limit decreases, the interest rate hikes and the strain of the general economy.  The net net is that consumers are cutting back their spending – whether they need to or not.  Look we’ve lost 5 Million jobs, but that a change in employment of 3% of our country.  Yet, doesn’t it feel like more than 3% are cutting back.  Heck, I’d be surprised if 3% are still spending the same.  I feel like everyone I know is conserving and the credit scores reflect this.

SAN FRANCISCO, CA — 04/15/09 — Credit Karma (www.creditkarma.com), a pro-consumer credit score
tracking and management service, today released its U.S. Credit Score Climate Report with trend data for March 2009. During the December 2008 to March 2009 time period, Credit Karma saw an increase in credit scores across all geographies and most age groups. 43% of consumer credit scores have gone up, 27% have gone down, and 30% remained the same. Of the scores that increased, the average credit score
rose 14 points during the time period. Of the scores that decreased, the average credit score dropped 14 points. The current average U.S. consumer credit score is 678.

The Credit Karma U.S. Consumer Credit Score Climate Report provides a monthly barometer on consumer credit trends, a particularly important economic indicator in today’s market. Each month, the Report offers unique and insightful statistics on the health of consumer credit scores nationwide. Trend data in the report is based on a comparison of Credit Karma users’ March credit score with their previous credit score at least 30 days prior and no more than 90 days out. Here are some additional findings:

– Average credit score with no change is 695 whereas 674 and 665 are the respective credit score averages for those with an increase and decrease. This would suggest that people with higher credit scores maintain more stable credit scores while those with marginal credit scores tend to be in flux.

– The 65 and up age group was the only age group that didn’t see a majority of credit scores increasing. 32% of this age group’s credit scores increased, 27% decreased, and 42% remained the same. The average credit score for the 65 and up age group is 735.

– Compared with February, more consumers’ credit scores are going up. In February 2009, 39% of consumer credit scores went up compared to 43% in March. That average up credit score in February was 675 compared to 674 in March. Fewer consumers’ credit scores have also gone down. 29% of credit scores dropped in February compared to 27% in March. The down credit score in February was 663 compared to 665 in March. 32% of consumers had their credit scores remain stable in February compared to 30% in March. Of the credit scores that remained stable, the average was 695 for both February and March.

– The Midwest had the highest increase with 44% of consumers seeing their credit scores go up in March. The average up credit score in the Midwest is 674. In February 2009, 41% of Midwest consumers saw their credit scores rise and the average up score was 676. Amongst states, Illinois saw the most credit scores go up in March. 45% of Illinois consumers had their credit scores rise and the average up score is 683.

Methodology

Each month, the Credit Karma U.S. Consumer Credit Score Climate Report compares the current credit scores of its 350,000 user base with previous scores pulled at least 30 days prior and no more than 90 days prior to the stated month. This month’s report includes a comparison of more than 30,000 Credit Karma user scores.

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