It’s no secret that many Americans have had a rough go of it in the economic downturn. In fact, FICO recently reported that 25 percent of Americans now have scores below 600, considered a “poor risk” for lenders, which is 10 percent higher than the historical average. In an attempt to help those struggling with bad credit, a new bill introduced in Congress is looking to help give people a fresh start.
According to the Chicago Tribune, Jackie Speier, a Democrat from San Francisco, has introduce a proposal that will prevent credit scores from dropping if a consumer seeks help on their monthly mortgage payment. Many Americans who are tightening their belts because of unemployment or additional expenses have sought mortgage modifications to make their monthly payments a little easier. However, these changes, if approved, reflect negatively on a credit score, meaning that buyers may have difficulty getting a car loan, life insurance or potentially even a job.
“I am seeing people with sterling credit have their scores dinged as much as 100 points,” Speier told the news source.
Those who fall into the lower end of the credit spectrum shouldn’t panic. There are many options for obtaining a bad credit car loan, and by making the payments on these and other obligations, consumers can restore their credit scores.