Number Of Americans With 'Subprime' Credit Scores Continues To Fall

A new wave of Americans with improved credit could help boost bank lending, according to a Fortune report.

What Is Considered Supbrime Credit?

Low credit scores are sometimes referred to as ‘subprime,’ and a subprime borrower is most often defined as someone with a credit score in the range of 300 and 599. A perfect credit score is 850. The number of Americans with scores falling in the subprime range has been falling for the past six years.

Banks tightened their lending practices following the financial crisis and, despite several of the biggest banks being rescued through taxpayer funded bailouts, have remained tight-fisted in the years since.

The Societal Benefits of Lending

More Americans with higher scores may loosen the banks’ grip on their cash. A larger base of customers available for loans should unleash higher profits for the banks, creating a circle of prosperity for banks and the customers they look to lend to. More loans granted often means more consumer spending, supporting retail, auto purchases, home purchases, travel and hospitality providers - the list goes on. More spending can support increases in employment and higher wages.