On August 4, 2011, the national debt was reportedly soaring at $14.34 trillion dollars. Fortunately, U.S. consumers are not following suit. Despite the government’s declining financial status, households across the country are taking a closer look at their own creditworthiness and, where applicable, their credit repair as well. As of 2011, the average credit score rose for the fourth consecutive year, totaling just under 700 points. Not only does this trend promise a brighter future for individuals, it could help jump-start the economy as well.
Fortune for the Every-Man
In the wake of a 9 percent unemployment rate, the devaluation of the American dollar, and an unsure economic future, it is no surprise that the average household is taking precautions to ensure financial security. According to TransUnion, Americans have cut their credit card debt by 19 percent since 2008; a surprising revelation in a world where maxed-out limits are the norm. With a 30 percent decrease in household debt, credit scores are benefitted. For the savvy spenders, the benefits are imminent, allowing them access to:
- A more regulated real estate market
- Low interest rates
- Flexibility within existing commitments (e.g., loan refinancing, shopping for competitor prices, etc.)
- A lifestyle based on strategic planning and budgeting
Although the recession has left many in dire straits, the promising trends have led others to loosen their purse strings and take their credit scores out for a spin, much to the benefit of the overall economy.
Hope for National Improvement
In spite of a difficult recession, data suggests hope for recovery. The Federal Reserve reported that $1 trillion has been pumped back into the economy since 2008; $8 billion of which came from consumer credit repayment. According to economists, with debt declining and credit scores rising for some, the effects on U.S. businesses and the economy as a whole are bound to see positive results. While it seems counterintuitive, spending is the key to the nation’s economic rebound. As consumers commit to credit repair, begin budgeting and spending accordingly, the climate’s slow pace is expected to accelerate.
Make no mistake, credit repair is not simply a personal endeavor: the ability for U.S. consumers to secure credit affects the very nature of our economic climate. If you are considering a change in your monetary approach, do some research and find your motivation. Not only will credit repair benefit your life, the broader strokes of saving (and spending) will help to build a stronger American future.