Covid-19 has wrecked the economy - but credit scores are up!
Despite millions of Americans losing their incomes, credit scores are on the rise. Industry Analyst Ted Rossman of Credit Cards Dot Com says there are a few reasons.
First, people are spending less and that helps their credit utilization ratio. Says Rossman:
" 'Credit Utilization Ratio' is an important part of your credit score. That's credit you're using divided by the amount of credit provided to you. By spending less, your increase that part of your score."
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Second, both the government and lenders are giving a hand up. Rossman adds: "The government stimulus programs and federal and financial industry hardship programs have helped out Americans a lot. Some even have received permission to skip payments."
The average FICO score in July is 711. "Paying your bills on time is important for your credit score to stay good. Surprisingly enough, people have been doing well on that. Some through their own hard work and others through help from both the federal government giving them permission to skip payments."
photo: Getty