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Data shows mixed picture for U.S. credit landscape

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There’s good news and bad news for credit in America, recent data reveals.

In short, Americans’ credit scores (specifically, the VantageScore 3.0 credit score from Experian) are on the rise. And Americans’ ability to pay down debt may also be improving, indicated by a decrease in revolving debt from October to November 2019, according to the Federal Reserve.

But the number of at-risk or credit-insecure counties, as defined by the New York Fed, increased from 964 in 2007 to 1,069 in 2018, according to a report from the Federal Reserve Bank of New York.

Check out the infographic below to get a fuller picture of the U.S. credit landscape. And read on for more details about what this all could mean for you.

Want to know more?

What’s the data showing?

Experian research shows that in 2019, the average American’s VantageScore® 3.0 credit score from Experian was 682, the highest in eight years. And Federal Reserve data shows revolving debt was on the decline in November 2019. So it’s likely people were carrying less credit card debt month to month since credit card debt makes up the bulk of revolving debt in the U.S.

But many Americans may struggle to get equal access to credit. A report on credit access from the Federal Reserve Bank of New York shows that more American counties are considered credit at-risk or credit-insecure in 2018 than in 2007.

What does this mean?

We can’t say exactly what 2020 holds. But some banks began tightening credit card lending standards in 2019. The rationale many senior loan officers cited in a 2019 survey from the Federal Reserve included concerns about the U.S. economy as well as worries that borrowers were going to reach a point where they couldn’t pay back their debts.

It’s unclear whether the decrease in revolving debt will have an effect on lending standards for credit cards for 2020.

What can you do?

Is news about the possibility of tougher lending standards worrying you? If that’s the case, here are a couple of tips to keep in mind.

  • Understand your credit scores. Learning what factors affect your credit scores can help you address your habits and work on building your credit.
  • Set a budget and stick to it. Understanding your income and debt by creating a budget may help you figure out how to reach your financial goals. If budgeting is a challenge for you, consider trying a method like the 50-30-20 method so that it’s easier to track what percentage of your money goes to bills, wants and savings.