| January 22, 2016

Research of the Week: Mad About Maxing Out

Most Americans are using most of their credit already. And that’s a big problem.

Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…

The interesting study

A research report called The State of America’s Credit really got local: It analyzed credit data by ZIP codes, culled from 2.5 million members of the personal finance site Credit Sesame.
Average Credit Score by State Provided by CreditSesame.com

The big results

Like many research projects, sometimes the most important fact to the average American is buried at the bottom. In this case, this is the last little nugget in Credit Sesame’s report: “More than half of Americans are using 70 percent or more of their available credit!”

No, we didn’t add that exclamation point. Credit Sesame was shocked to learn 56.5 percent of those they surveyed have just about maxed out their credit. What’s that mean? Two things, both bad:

  1. They’re likely paying sky-high interest rates on their debts, which makes it nearly impossible to get out of debt.
  2. If they face an emergency expense (car breaks down, medical emergency) they have very little money they can tap into.

The fascinating details

Since Credit Sesame was studying ZIP codes, its researchers decided to find out a weird fact: Which city has the “the largest credit discrepancy”? In other words, what U.S. city has two ZIP codes with credit scores in the Top 10, and two ZIP codes have scores in the Bottom 10?

Answer: Chicago. Only a few miles separate Lake View (707 credit score) and Lincoln Park (705) from Englewood and West Englewood (both 534).

What you can do

Regardless of where you live – and even what your credit score is – if you’ve nearly maxed out your available credit, you’re facing a crisis. You’re paying high interest rates, which means you probably can’t get ahead of that debt. Even worse, if you’re just making minimum payments, you won’t catch up for years or even decades.

Your best option is a free debt analysis from Consolidated Credit. Both the call and the advice from a certified credit counselor are free, and you’ll learn about all your options for getting off that credit treadmill. Call .

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