More people have been choosing to clean up their credit and pay off credit cards as credit card interest rates have increased. This is a positive move in an effort to increase their credit scores and make them more eligible to buy a home. Although people have been cutting back other spending while doing this and growth of the economy has suffered, they are becoming responsible spenders. As this movement continues, the percentage of borrowers that are credit worthy and able to buy should increase over time. Just as it took many years for this turmoil to occur, it will take time for the benefits of these actions to be seen.

Also see Rates Cruise Through Week at All Time Lows -- Wow! All that government support pouring into the mortgage market (via the Fed, FHA, and Fannie+Freddie) has sure worked "magic". For now.


catherine at 14:43 2010-09-30 said:
a lot of those people have cashed out 401s, (most in history) to save their credit cards, that is so they have a cushion to live on when they lose their jobs...............not worrying about credit scores to buy A FALLING ASSET.....

or else they have been living in their to-be-foreclosed home for 1-2 years for free and shoring up their back-up credit in the cards...............

sadly when losses to cards start again the companies will cancel those cards right out from under those people that kept their payments up for the lifeline they guaranteed. Sad BUT deleverage works that way.............. Permalink

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