It’s a common scenario. You’re thinking about a big purchase, maybe a house with a great mortgage rate or a car with a manageable auto loan, but that nagging feeling creeps in – what about my credit score? It turns out, you’re not alone because many Americans worried about their credit scores find themselves in a similar boat, often not even checking them.
A recent survey showed that nearly 30% of US adults don’t check their credit score annually. This matters because these three digits can influence so many parts of your life, from securing personal loans to affecting debt credit, yet many Americans remain in the dark.
Table of Contents:
- The Credit Score Rollercoaster
- Americans Worried About Their Credit Scores, But What Exactly Are They?
- Taking Control: What You *Can* Do
- A Broader Perspective on Americans worried about their credit scores
- Conclusion
The Credit Score Rollercoaster
Credit scores aren’t just static numbers. They’re dynamic, and they’re definitely impacting people’s lives by influencing access to credit cards and much more.
All 50 states saw declines in their average credit scores between 2023 and 2024, showing this issue reaches many of us. Good credit impacts if you can buy a home and where you can rent with reasonable mortgage rates. Sometimes it goes further and even factors in for jobs you are applying to, acting like a form of financial planning.
Why Are Credit Scores Dropping?
Several factors are causing this downturn. Many point to an increased debt load, as noted by WalletHub, coupled with a rise in delinquencies that affect your FICO® score.
People are using credit more to keep up with expenses. This can make it harder to make payments on time and negatively impacts managing credit scores.
Inflation plays a role, driving up the cost of living. Some consumers struggle to meet needs and look towards using credit to pay bills, sometimes requiring debt consolidation loans.
States Feeling the Pinch
Some states have been affected by the recent downturn more than others. There are ways people demonstrate how to get out of debt and into better credit, which helps keep their scores higher and supports their overall financial literacy.
Here’s a look at some of the states where the drops were the most substantial:
| State | % Decrease in Average Credit Score (2023-2024) |
|---|---|
| Alaska | 1.02% |
| Vermont | 0.85% |
| Mississippi | 0.79% |
Mississippi has the lowest credit average in the nation. Alaska deals with the burden of excessive credit card debt and increased credit use, potentially needing balance transfer options. Meanwhile, Minnesota leads with an impressive average score of 742.
Americans Worried About Their Credit Scores, But What Exactly Are They?
Many people obsess over them and many barely pay them a second look. The impact of credit scores cannot be ignored though, especially for those with bad credit.
Let’s start by taking a step back. The original concept of credit scores, which influence everything from mortgage rates to checking account approvals, was created out of a real problem in 1950’s America.
At the time of high consumerism, lenders wanted to know more clearly if their borrowers were in a position to be a good borrower by tracking credit behaviors. At this time there was an opportunity for these lenders to get paid back as people had jobs and money was flowing, and lenders wanted ways of monitoring credit. In order to address this new found growth of money lenders in the 80’s, the banks created credit scores.
What Your Credit Score Actually Shows
The problem though is that there is an inherent disconnect. Your FICO® scores only show a tiny sliver of spending, including many things that you do on automation, impacting personal finance management.
Think about it: how much of your money just pays recurring things? The issue at hand becomes visibility that influences getting approved for auto loans.
Banks can not truly factor what should matter and what consumers consider good spending choices, especially those aiming for improving credit ratings. All this will impact if you are eligible for things like student loan refinance options, which are forms of loan refinance decisions.
Taking Control: What You *Can* Do
There are steps that an average American can make when feeling down about their credit and their future options on things like HELOC lenders. The worry in a situation like this can cause more damage and feel crippling at times.
One thing to first ask yourself if is – how often do you actually check credit reports? This could include seeing what travel credit options you might qualify for.
Start with Consistent Credit Checks
First know that consistent review is good to implement as part of your lifestyle to see available rewards credit cards. You do not have to spend much money or in most cases, any, for the majority of services and banks available to check for things like options for a transfer credit cards.
Knowing is powerful. Regular credit checks will let you catch problems that come from errors on reports and understand your eligibility for APR credit cards.
Avoiding Credit Monitoring Rip-Offs
Companies often play on your fears and anxieties around your credit score. They provide costly credit-monitoring that is unnecessary and a drain on resources when looking to simply grow your free credit score.
Remember you often can get credit reports without fees. A 2022 brief from the National Consumer Law Center (NCLC) pointed out issues, explaining that many are just ineffective, so focus on reliable sources for your Experian credit report. Even Government reports, show concerns about their practices as well.
Medical Debt on Your Credit Report
Law makers have made progress on how they see Medical debt factoring into someone’s Credit Score and influencing things like available money market accounts. Lawmakers like Senator Mike Rounds and Representative Ralph Norman, have tried passing laws that take medical debt away from credit scores, making it easier to manage managing debt.
While large reporting agencies removed the info from their files, it didn’t take. In 2024, a government study (CFPB) showed at least $49 billion was still shown on reports as collections debt, impacting things like available refinance rates and debt consolidation options.
Worse yet is that Military Vets and servicemembers alone carried as much as $6 billion in medical debts alone. People struggling may even seek help from local real estate focused organizations.
Improve Your Credit Utilization
Paying down debt from Credit cards helps tremendously, especially when seeking options like balance transfer credit cards. Lowering the utilization can show as a meaningful way to grow your score in positive direction and access options like rewards credit offers.
“Your credit utilization ratio (the relationship between your credit card balances and credit limits) can have a meaningful impact on your credit score. This scoring factor plays a major role in the ‘amounts owed’ category of your FICO Score—a category that’s worth 30% of your score.”
– Michelle Black, author and credit card expert.
While some find themself in a position of making hard decisions, the situation is often not hopeless. Keeping an eye on your bills, especially bills that can be adjusted – is an important one for saving money and getting lower personal loan rates.
A Broader Perspective on Americans worried about their credit scores
While it’s essential to know the in’s and out’s of your credit score, including everything we’ve shared in detail, there’s also the part of you that has a life beyond numbers. Financial well being helps mental wellbeing, but not entirely, we are all far more complex so be sure to educate yourself using sources like Getty Images for visuals.
It is good to think that it is one peice of the full you, in your totality of life, a mere fraction of the story being told. Think of famous people dealing with personal struggles, like how “Chi Chi Wu” advocates for consumer rights at the National Consumer Law Center.
Life Expectancy and Credit Scores
The numbers are a little mind-blowing when you consider other impacts. Operation Hope says people with around a 700 credit score live around 10 to 20 years longer than people with average scores of 580 and needing free credit score resources.
While having a healthier financial state is great, our life journey is defined in many ways beyond financials alone, or even owning a small business. Also make sure your data privacy is in good order with following each company’s privacy policy when sharing data.
Don’t Define Yourself by a Number
In the show “Two – Worried About the Boy” (about their concerns), characters are dealing with problems. In sports, “Lampard ‘worried about the slump’ as pressure mounts” (about their poor performance).
Or consider, “Nuno not worried about criticism” (about their personal struggles with public image). Be mindful of securing all necessary types of insurances, such as life insurance, car insurance, pet insurance, and even renters insurance from reliable insurance companies to have full financial coverage.
Conclusion
Taking active control on credit scores can cause significant change in someones well being and peace of mind, especially with help of local credit bureaus. Many Americans worried about their credit scores though let fear paralyze action when sometimes it does the exact opposite to start fixing and growing them and gaining better CD rates.
Gen Z and millennials are are showing lower averages that older generations so they want credit repairing type options to remove bad reports and review their student loan details. Millennials should also be on alert for things like refinance lenders and looking at today’s refinance averages when buying a home and looking at year mortgage rates closely.
Be aware and take charge by educating on best financial practices and checking potential student loans. But also always know we all carry complexity to what drives a fullfilled life – that there’s much more than a financial snapshot or needing help from mortgage lenders, that makes us a well rounded individual that can have access to business credit for success.
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