Tuesday, July 29, 2014

Why Credit Collection Is A Big Business In The US

Over 220 million Americans have a credit file at one of more of the credit reporting agencies in the US.  A recent study found that 35% of Americans with a credit file have at least one debt that has been referred to a collection agency.  That does not include mortgage debt and it excludes 22 million low income citizens who do not have a credit history.

The findings in this study are similar to those reported by the Fed in 2004.  Apparently,  this is not a new problem in the US.  On the other hand, the consequences for those with debts under collection are serious.  It is harder for them to access new credit and many employers use data from the credit agencies when making hiring decisions.  Many of the debts under collection are under $100 and the average debt under collection is only a little over $1,000.

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