Credit Scores Hit Record High

Credit scores for U.S. consumers reached a record high this spring while the share of Americans deemed to be some of the riskiest borrowers hit a record low, reports The Wall Street Journal.

The idea that the U.S. economy is currently in a recession does not fit the facts. It is a delusional perspective.

To be sure, the Federal Reserve via its monetary policy does create the boom-bust cycle, but it is a boom AND bust cycle and we currently remain in the boom phase.

Just look at the chart below. This is no what a recession looks like.

The average credit score nationwide hit 700 in April, up one point from last fall, according to new data from Fair Isaac Corp. That is the highest since at least 2005. That was the year Fair Isaac, the creator of widely used FICO credit scores that range from 300 to 850, began tracking the data.

Meanwhile, the share of consumers deemed to be riskiest, with a score below 600, hit a new low of roughly 40 million, or 20% of U.S. adults who have FICO scores, according to Fair Isaac. That is down from 20.5% in October and a peak of 25.5% in 2010.

I caution that this boom will end badly because it is a Fed manipulated boom, but the idea that we are in constant recession is a failure to understand the fundamentals of Austrian school business cycle theory.

 -RW