Credit Repair Blog

Americans are Getting Further In Debt

The U.S. Federal Reserve just released it’s most recent “Consumer Credit” report.  If you like numbers and stats, you can check out the full report here.  If you just want the Cliff-notes version, here it is:

Americans are getting deeper into debt.  According to the report, consumer credit rose at an annual rate of 5 percent in the second quarter of 2008.  Both revolving credit (such as credit cards) and nonrevolving credit (such as car loans) increased by 5 percent in the quarter.  In June, consumer credit skyrocketed by 6-3/4 percent at an annual rate.

Heavy debt loads are obviously a big concern.  With higher debt, most Americans have lower savings, and less financial room to handle unexpected emergencies like layoffs or medical problems.  Sure, its likely that lots of people had to take out loans to cover unplanned emergencies this year (there have been lots of layoffs this year, and the job market is tight).  But how much could we all save if we had better credit scores?  Think about it—a person with bad credit can pay almost twice as much on a car loan (or more) than a person with excellent credit.  We may not be able to immediately stop our reliance on debt, but we sure can take steps to reduce the amount we pay in interest each month to the credit card, mortgage, and car loan companies.

Do yourself a favor and take some simple steps today to improve your credit score.