For the 18th straight quarter, in the last part of 2018, Americans’ aggregate debt reached a new high of 13.5 trillion.
More than seven million Americans are in trouble with their car loans. They’ve reached a serious delinquency level that sets them up for plunging credit scores and possible repossession of their vehicles. While the economy seems strong at this point, rising debt levels set already financially strained families up for failure when it comes to managing their money. Late loan payments show up on a credit report and cause scores to drop quickly. This translates to higher car insurance premiums and interest rates on revolving debt like credit cards. Low credit scores could even prevent people from getting the job they want. For those renting their home, a low credit score could mean they’ll pay a higher security deposit if they decide to move.
For Americans carrying an ever-growing debt load, these increases in normal bills could be devastating. Financial education and awareness of credit scores is crucial no matter your income level. For those with tight budgets, understanding the importance of making loan payments on time to preserve and increase credit scores is an important part of overall financial health. The Federal Reserve has stopped raising interest rates, possibly in response to Americans’ new record-high levels of debt.
