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As scores drop, consumers may look for an option like debt consolidation
By Angela Hawke on Jul 12th, 2010
One of the major dangers of not keeping on top of debt is that it can lead to damaging a credit score, which could make it more difficult to secure credit cards in the future.
According to a report from the Associated Press, credit score company FICO reported recently that about a quarter of the U.S. consumer population has a mark of 599 or below. The news organization noted that this puts people at a level that makes them rather risky for banking institutions and other financial corporations.
"It's unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use," the wire service said.
One thing that affects a credit score is how much debt a person has amassed on their cards, especially with regards to their credit limit. The higher percentage of use, the lower the score a person may have.
Paying credit card bills late can also lead to a lower credit score. Because some people may find it harder to do so, they may consider an option like debt consolidation, which can lead to lower interest rates on card debt.
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