Human Services News

Brookings Institution

Findings Consumer credit reports and scores play a growing role in the ability of families to get ahead, now influencing prices for loans and insurance and efforts to get jobs and rent apartments.

Consumer credit scores widely vary across counties, with the South having the highest concentration of consumers with weak credit scores.

In 2004, among all consumers, the average score on a credit score index maintained by one of the major bureaus was 656, out of a scale that ranges from 350 to over 850.

Meanwhile, the average credit score in the South was 635, and more than one in five borrowers in a typical Southern county have scores that suggest they are very risky borrowers.

Between 1999 and 2004, most counties with weak consumer credit scores saw declines in the average consumer credit score, while counties with strong scores generally experienced modest gains.

High homeownership rates and county per capita income are strongly associated with high consumer credit scores.

The average county with a low, mean credit score had a per capita income of $26,636 and a homeownership rate of 63 percent in 2000.

About one out of every 21 borrowers had at least one credit-bearing account 60 or more days past due in 2004.

Consumer credit reports and scores are playing a growing role in the economic mobility of consumers today.

But rising consumer debt and loan delinquencies mandate that government leaders, with their private sector partners, pursue a series of reforms to increase consumer education and responsibility, market accountability, and accuracy.