The Landscape of Credit, Debt, and Avoiding Common Pitfalls in Personal Finance

The journey of rebuilding credit can seem daunting for most, especially if you have ever experienced issues such as bankruptcy and delinquency that resulted in legal action. Small steps such as creating a budget, tracking your expenses, and making payments on time can help you take control of your finances and start repairing your credit. Monitoring your credit score is another key step to ensure you are on track to rebuilding your credit.

According to a report by Lexington Law for 2023, the average credit score data by Experian shows that 2022 experienced a slight increase from the previous year, going from 714 to 716. The data suggests that since 2017, the average credit score has been gradually rising. This is an encouraging sign for consumers and shows that the efforts to improve credit scores have been effective. This is likely due to the efforts of consumers to pay down debt, reduce spending, and build a positive credit history. Additionally, many lenders have become increasingly lenient with their credit requirements, making it easier for consumers to access credit and improve their scores.

Nonetheless, according to data from the diagram, Americans face rising credit card debt at historical highs and the lowest percentage of personal savings and disposable income since 2006. This is according to data retrieved from Statista. This means American households have less disposable income to save or spend on other items, leading to further financial insecurity. This can have long-term consequences on the country's economic health, and individuals need to be aware of the risks associated with high levels of debt.

Therefore, it is imperative that we are aware of the common issues surrounding debt and take steps to reduce it. Budgeting and sound financial practices can help you reduce your debt and make better financial decisions. An experienced credit consulting company, such as Greenpoint Knowledge Venture LLC, can be helpful when you're facing challenging financial circumstances. Developing a credit strategy that spans over an extended period of time is essential to avoid the potential setbacks that come with debt and credit card usage. I will explore additional strategies in the next quarterly newsletter. 🙂

Works Cited:

• Experian. (2023). What Is the Average Credit Score in the U.S.? Retrieved from https://www.experian.com/blogs/ask-experian/what-is-the-average-credit-score-in-the-u-s/ 

• Federal Reserve Bank of New York. (2023). Household Debt and Credit Report. Retrieved fromhttps://www.newyorkfed.org/microeconomics/hhdc/background.html 

• Lewis, N. (2023, -03-01T21:56:00+00:00). 30 credit score statistics to know in 2023.https://www.lexingtonlaw.com/blog/finance/credit-score-statistics.html

• U.S. Bureau of Economic Analysis (2023) Personal saving as a percentage of disposable personal income [A072RC1Q156SBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/A072RC1Q156SBEA, July 2, 2023.