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Credit Scores

I ran across this article today about the distribution of American's credit scores.

Its reportsĀ  "show that 25.5 percent of consumers -- nearly 43.4 million people -- now have a credit score of 599 or below, marking them as poor risks for lenders."

Investors should begin to think over how to model the availability of credit and the different distributions of credit scores in their econometric growth models; and pay closer attention in the financial statements of consumer finance companies. I think I will be going through the footnotes here to see if any material changes are being buried. Long investors are cautioned to do likewise and Shorts might also find something of interest - hard to imagine some consumer lender not having problems with over 43 million Americans having subprime credit.

Disclosure: No Positions