Despite concerns that credit card limit cuts would devastate consumers’ credit, scores nationwide seem to be holding steady, according to Credit Karma, a score-tracking site.
Credit Karma’s latest survey found 34% of consumers saw their credit score stay the same in June compared to 32% in May. Nationally, 28% of consumers saw their credit score decline in June, which is slightly lower than May. And 38% of credit scores increased.
Now, while Credit Karma doesn’t use the FICO scoring formula that most lenders use, the trend is interesting because it seems to confirm what FICO has said: Limit cuts are not hurting consumers as much as some have expected, because consumers are reining in their spending, reducing their balance and new purchases.
Some of Karma’s other findings:
- The South as a region had the highest percentage of increasing credit scores, ending the Midwest’s four-month run at the top. In June, 39% of consumers in the South saw their credit scores increase; 28% of credit scores decreased; and 33% of credit scores stayed the same.
- Michigan had the highest percentage of increasing credit scores during June at 41%; 27% of credit scores declined; and 32% stayed the same.
- Texas saw the highest percentage of decreasing credit scores with 29%; 39% of Texas consumers credit scores increased; and 32% stayed the same.
Want to learn more about boosting your credit score? Check out my latest columns: