Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
The number of Americans with subprime credit scores – generally considered scores below 620 – has been shrinking across the country, but the trend is playing out differently throughout the nation’s largest metro areas.
Of the 25 largest U.S. metro areas, 24 saw decreases in the number of subprime borrowers over last year, a welcome change during a time when lending standards have tightened across the board. Throughout the nation, the total number of consumers with credit scores below 620 fell 2.1 percent, or by about 1 million consumers, in the third quarter of 2012 versus the third quarter of 2011.
“We are seeing a trend of consumers being careful and disciplined about their use of existing credit while also being cautious about using new accounts they have opened,” said Trey Loughran, president of the personal solutions division at Equifax.
Though the average credit score has remained relatively stable throughout the recession, the number of subprime consumers has grown over the past five years, as Americans lost their jobs or homes and struggled to make payments on time, if at all.
But the slow-moving recovery, including improvements in the job market, has helped many people improve their credit history and inch past the 620 mark.
The 620 score is often considered the benchmark score for subprime consumers, though typically lenders and banks have their own standards. Someone with a credit score below 620 likely will have a harder time securing credit, particularly a mortgage, and may pay a higher interest rate, if they can secure a loan.
Chicago, despite its sputtering housing market, has seen the largest decline in consumers with credit scores below 620. The Chicago-Gary-Kenosha metro area saw a 9 percent reduction in subprime consumers, dropping from nearly 1.7 million people in the third quarter of 2011 to a little more than 1.5 million in the third quarter of 2012.
Houston, on the other hand, was the only city that saw its population of subprime consumers increase—by just .6 percent.
The credit score differences between geographical areas can be attributed to a number of factors, including employment, population shifts and demographic changes. In Chicago, the unemployment rate declined 1.5 percentage points to 8.8 percent—the fifth best improvement in unemployment among the largest 25 metro areas. Overall population also declined in the area, and the improvement in credit scores might be attributable in part to migration of unemployed people out of the area. The Houston area, however, saw a population increase.
Behind Chicago, California saw large decreases in the number of subprime borrowers. The San Francisco and Oakland area saw a 6.4 percent decrease of subprime consumers, while Sacramento saw a 6.2 percent decrease, followed by San Diego and Los Angeles which both had 5.3 percent decreases.
There have also been significant improvements in other early housing-bust markets such as Las Vegas, Phoenix and Miami, where people’s credit scores are starting to recover after foreclosures.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.