I think we can all agree that it’s hard to improve your position in life, love, finances, really anything, if you don’t know where you currently stand in the first place. In fact, according to the 2009 Financial Literacy Survey taken by the National Foundation for Credit Counseling, 37% of the American adult population (meaning more than 1/3) doesn’t know what their credit score is.
So I think it’s time that we face the truth about credit in Arizona. In fact, this may even make you feel better (No really). So here it is:
In 2011, Arizona was ranked number 5 in a national listing of states with the worst credit health researched by cardratings.com. The test was conducted by scoring 2011 statistics concerning the following criteria:
1. Average credit scores
2. Foreclosure rates
3. Credit card delinquency rates
4. Unemployment rates
5. Bankruptcy rates
The cause of our strong negative ranking is due to our position within these fields of credit. Arizona was found to have the second largest number of foreclosures and to be among the 10 worst states for credit scores, credit card delinquencies and bankruptcies. I know I said this would make you feel better, but stay with me here. What these statistics prove to show us is that if you have bad credit, you are not alone.
While personal credit is an individual’s responsibility, if your surrounding area has bad credit, it can affect everyone, leading to a catch 22. When our state’s economy is down, banks and other lending institutions have to limit their available financial services, making them reluctant to extend credit to its customers. This causes the economy to develop more slowly, affecting employment and business conditions, even real estate values, and therefore limiting ways for residents to recuperate from their current credit situation.
So how do we fix this? How do we, as a state, confront our bad credit together? Well, baby steps really. As individuals, we can slowly but surely turn things around. First, GO TO YOUR BANK AND FIND OUT WHAT YOUR CREDIT SCORE IS. Secondly, ask them if there is any way to consolidate your debt, minimize your current interest rates, or set up a savings plan to go towards paying off debt. Don’t be afraid to ask these questions. The banks may seem scary sometimes, but they need your business just as much as you rely on them. Why? Because they can be your defenders. And they need to continuously Earn Your Business. If you are a loyal customer to your bank and/or credit card agencies— meaning you you’re your payments on time (mostly), you’ve been with their company for a long time as opposed to switching banks all the time, and you go to them with most of your financial needs—then they’re more willing to help.
The most beneficial thing you can do is make a plan, stick to it, and watch out for false advertised “quick fixes” to credit. There’s NO such thing.
And remember, it’s ok to ask questions. Ask your personal bankers. Ask your favorite search engine. Heck, you can even post them here if you like. And share your knowledge because the more everyone does their part, the faster (although I’m using that term loosely) everything will begin to turn around for our state.