Report finds more people approaching perfect credit scores

Analysis of credit score data by FICO, the company that pioneered credit scoring, finds that while the recession has definitely had an impact on some U.S. consumers, more people are now moving toward the perfect credit score of 850.

In a sampling of credit profiles from last fall, the firm says that the percentage of consumers with credit scores between 800 and 850 had jumped to 18.3 percent – the highest percentage seen since last 2008, when 18.7 percent of borrowers reached that mark.

However, at the same time, the ratios of those with very good credit scores – those between 700 and 749 and 750 to 799 – have dropped. The percentage of consumers in the former range is at its lowest rate since 2005.

"There has been a clear shift," said Rachel Bell of FICO Labs. "Many consumers have moved into the top tier of the FICO Score range by redoubling their efforts to maintain an excellent credit profile. Other people have fallen into lower tiers, most likely due to the financial stress that many households have been feeling."

The downsides of the economic situation have been severely felt in some households, however. FICO says that nearly 32 percent of consumers have credit scores between 550 and 699. That is the highest number of people in that range in more than five years.

Most people have continued to manage their credit well

The firm added that despite the negative shifts for some people, the majority of U.S. consumers still had scores between 700 and 850, which means that the majority of consumers have still done a fairly successful job managing their credit scores.

In addition, the percentage of people with credit scores in the very bottom rung – 300 to 549 – dropped to 14.9 percent. That is the lowest since 2006.

"One possible explanation for the decrease in the number of consumers in the very bottom tier of the FICO Score range is that lenders have written off a lot of bad debt and closed the riskiest credit accounts," said Bell.

However, other consumers may also be dealing with issues on their credit reports, as there may be errant or unfair markings present. Working to remove these problems with those files may result in an improvement in their scores.