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Rise in credit scores may be good news for those in Illinois

As the country continues to heal from the "Great Recession," some residents of Illinois may have found that their credit scores have since gone up. In fact, as of spring credit scores have reached an all-time high since 2005, and at the same time, the number of "risky" borrowers has reached an all-time low since 2005. The higher a person's credit score is, the more appealing they are to lenders, and if they are approved for a loan or credit card, it may be at a lower interest rate.

For example, as time marches on, consumers who had their homes foreclosed upon or who filed for bankruptcy during the Great Recession are finding that these actions are being taken off of their credit reports. Moreover, according to a Barclays PLC report, over six million people in the United States who filed for personal bankruptcy will have that filing removed from their credit report over the next five years. Mortgage foreclosures will remain on a person's credit report for as many as seven years. A consumer bankruptcy filing will remain on a person's credit report for seven to 10 years.

As of April, the average credit score was 700. Moreover, only 20 percent of adults in the United States are deemed to be "risky" borrowers with credit scores under 600. This is a drop from 25.5 percent in 2010. This is good, as due to the Great Recession, many lenders have been hesitant to lend to those whose credit histories have been less than stellar. Now, it is more likely that consumers will obtain loans after issues such as a bankruptcy filing or foreclosure disappear from their credit reports.

This is good news for those who filed for bankruptcy due to the Great Recession. However, even these days if a consumer is facing overwhelming financial difficulties, they may still find that filing for bankruptcy is their best option. It can extinguish their debts, and as this shows, will not stay on their credit reports forever. It offers debtors the clean financial slate they need to move forward into the future.

Those who have questions about how filing for bankruptcy can help them may want to consider speaking to a bankruptcy attorney who can assess their case and provide honest advice.

Source: Fox Business, "Credit Scores Hit Record High as Recession Wounds Heal," AnnaMaria Andriotis, May 29, 2017

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