Average Credit Scores At New Low - Research Associate Jennifer Pitzer Interviewed by Ohio News Network

CINCINNATI — A sign that the economic recovery may take longer than expected came out on Monday as FICO announced that more Americans than ever have credit scores that make them poor risks for lenders, ONN's Lot Tan reported.

"I know a few kids in our company that are struggling now. Everybody's living paycheck to paycheck," said Kevin Kearns.

It's that way of life that may have contributed to the more than 43 million Americans having poor credit scores.

According to FICO, many of scores are lower than 599.

"It's not surprising given the environment we're in that people are making greater use of credit to finance lifestyle," said Jennifer Pitzer of the University of Cincinnati Economics Center.

For many who have lost their jobs during the recession, many turn first to their credit cards.

"My young co-workers are struggling because they racked up too much credit card debt," Kearns said.

Pitzer said poor credit scores could prevent people from getting car loans and mortgages, which could further slow down the economic recovery.

"It could cause a problem," Pitzer said. "If people are using credit cards to purchase things then they are less likely to obtain credit."

There was some good news in the report; FICO said the number of people with a top score of 800 or above have also increased.

"As people save more and pay down debt, they are trying to put themselves in a more secure position. It's instinct to save and pay down debt," Pitzer said.

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