Monday, May 29, 2017

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.



  1. Bob, you know that I love you, but what economist or commentator with any credentials has said that the U.S. economy is in recession? You have repeated this notion for at least 6 months; please name names.

    1. Its okay Dominick no one sees the obvious desperate push to keep the illusion alive. with the bulk of the middle class in debt to their eyeballs the only way you can fool some of the people is to make it look like everyone's credit is better than ever even though they cant afford to have any more.

      Its like any government sanctioned economic data. Go take a look at the debt picture Charles Hugh Smith for one paints. Its not pretty at all.

  2. Hi Dom,

    I don't want to name names but I can assure you there were many who said that after the Fed's first rate hike, the economy would crash and the rate hike would have to be reversed. (Maybe you can Google it.)

    I have even got emails from some employees at different organizations where this was going on, supporting my view.