Preferred Financial Services

Andover, Massachusetts July 30th2010 – Data released today by the government shows continued growth in the US economy but at a slower pace then expected or hoped for. After GDP increased by 5% in the 4th quarter of 2009 economists were hoping that the worst was behind us and the US economy would be shake off the recession and start growing again. However, the 1st quarter of 2010 saw a lower growth rate and today the Commerce Department reported that GDP grew by 2.4% in the 2nd quarter, much lower than expected and not enough to spur consistent job growth.

Reasons for this unexpectedly slow growth rate include continued high unemployment, very tepid consumer spending growth, as well as a growing trade deficit which is hurting our manufacturing industry and other export industries. Although this news gives some credibility to economists who fear a double dip recession, there is also some positive news to report. Businesses increased their spending on software and hardware upgrades by a huge 21.9%, indicating business are expecting the economy to turn the corner and are thus getting ready for increased growth. Home and commerical builders also posted some impressive numbers in the 2nd quarter with commerical building projects increasing by 5.9% and residential buildings increasing by a government aided 27.9%. Another interesting number to keep a track of is our personal savings rate as consumers. Before the recession, our savings rate was close to 0%  with some quarters even showing a negative savings rate.  As soon as the recession hit, this rate started to creep up, and last quarter it reached 6.2% of all disposable income, the highest it has been in a year. This is indicative of the continued high unemployment and limited job security. But, it could also indicate a fundamental shift in how Americans use and save their income.

The numbers we are reporting each week show continued ups and downs. No one, not even the Fed Chairman Ben Bernanke really knows where our economy is headed which is weighing down on all the important economic indicators. Stay tuned for more updates and to follow the pace of recovery in the US.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:
Stephan Tavernini
Marketing Coordinator
Certified IAPDA Debt Arbitrator
Preferred Financial Services
stavernini@pfs1.net

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Andover, Massachusetts July 28th 2010 – The rise of “free” credit report websites and services has been rapid and almost unregulated. Popular commericals from sites like Freecreditreport.com created a huge buzz for these sites and as a result millions of consumers signed up for their services believing they were getting a free credit report with no strings attached. The truth was in the fine print, like it almost always is. The sites offered a free credit report but only after the consumer signed up for a credit protection service or some other personal finance tool. Most times, this obigation was relegated to the fine print at the bottom of the site which obviously did not help the consumer make smart decisions. After enough complaining, congress acted and passed a law that required sites offering “Free” credit reports to post a link on their site stating….

“You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the ONLY authorized source under federal law.”

It was hoped that with that link on each site consumers would not be as confused anymore about the service they were buying and could access their free credit report without paying for any unwanted service. While the law has lowered the number of complaints, 18 companies continue to host sites that violate this law. Today these violaters were given a letter from the FTC demanding they comply. Hopefully the government will become more aggresive at requiring compliance with this law so no more consumer is scammed into a service he/she does not want.

The complete list of violaters can be found at http://consumerist.com/2010/07/a-list-of-18-free-credit-report-websites-warned-by-the-ftc.html

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:
Stephan Tavernini
Marketing Coordinator
Certified Debt Arbitrator
Preferred Financial Services
stavernini@pfs1.net

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Financial News, Personal Finance debt relief, debt settlement, preferred financial services

Andover, Massachusetts July 28th 2010 – When researching debt reduction solutions online consumers will come across literally thousands of websites offering some sort of service to reduce a consumers debt for a fee. While debt settlement has been around for decades in some form, there continue to be false rumors and explanations of what exactly debt settlement is, how it works, and how it benefits the consumer. If you are debating between options in regards to your debt, please review some of the following FAQ’s and contact me if you have any further questions regarding the process, its consequences, and its benefits.

• What is debt settlement?

Debt settlement is a legal way for the consumer to settle their debt for less than the principal balance.

• Is there a cost for this service?

Yes, there is a fee for this service and will vary from company to company. The industry average is 15-20%. While the fees may be similar, there are other factors to consider as well. Always ask about the refund policy and also where your money will be going. A reputable firm will place your funds in a 3^rd party account that you will have supervision over.

• How will debt settlement affect my credit?

Debt settlement is not a credit enhancement program, it is a debt reduction program. If your goal is to reduce your debt amounts owed then debt settlement could be a great option for you. If your goal is to improve your credit score then debt settlement will not be a good option for you. Enrolling in a debt settlement program will most likely lower your credit score in the short term while negotiations are ongoing. Once your debt has been settled your score can improve. Keep in mind, your credit score is made up of many different factors including your total debt, payment history, available credit, and public records.

• How long will a debt settlement program take?

The length of the program will vary according to each individuals circumstances. Factors that can impact the length include total debt amount, number and type of creditors owed, as well as the availability of funds that can be used to settle an account. Typical programs vary in length from 18-48 months.

• Will I owe money to the IRS after completing debt settlement??

This is a possibility with any debt settlement program. Any debt that has been forgiven with a value over $600 cane be considered income by the IRS. You will receive a form from your creditors at the end of the tax year that will allow you to claim this as income. However, there are times when consumers are able to write off this income based on IRS guidelines.

• How do debt settlement companies determine a client’s suitability for a program?

Most reputable debt settlement firms will complete a budget analysis with each prospective client to determine if the program would be a good fit. This analysis includes an examination of the clients income and expenses.

• Will all of my debt be reduced through a debt settlement program?

Debt settlement firms handle strictly unsecured debts such as credit cards, personal loans, medical bills, etc. When successfully completing a debt settlement program the account balances on any enrolled account will show a zero balance, which is the primary focus of the program. Remember, to complete a debt settlement program takes a lot of patience and commitment from both the consumer and the debt settlement firm over a substantial period of time.

Are there any other questions you would like answered? What questions did you ask when you were enrolling in a program?

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:

Stephan Tavernini

Marketing Coordinator

Certified Debt Arbitrator

Preferred Financial Services

stavernini@pfs1.net

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Andover, Massachusetts July 26th 2010 – As most Americans already know, the US economy has hit some major bumps over the past 2 years which have greatly affected the overall financial health of the country. The White House today released new estimates for the coming year on where our economy is currently and where it is heading. While some of the news is positive, the overall message coming out of Washington at the moment is that “We are trying, but get ready for a long and painful recovery.”

The newest estimate has our national budget deficit for the coming year at 1.47 trillion dollars meaning the US government is going to be borrowing 41 cents for every dollar they spend. The White House has blamed continued slumping tax revenues for the record deficit and there is no indication this will be improving anytime soon. The unemployment rate is at 9.5% currently and the new estimate has the rate staying above 9% for the remainder of the year. Obviously this is way above the historical average rate of between 5% and 6% and the President knows that his reelection campaign will face some serious opposition if he can not implement a plan to get people back to work.

The report released also outlined some of the main obstacles the USA will be facing in trying to shake off this recession and return to pre recession growth levels and prosperity. Banks continue to be reluctant when it comes to lending money to small businesses, the housing market continues to be a mess, and the continued worries about the euro currency will cause continued problems for economic growth. Although all of these issues remain very much a problem, the important thing to take from it is that the country has clearly weathered the worst of it. Unemployment has dropped from the high above 10%, the budget deficit for next year is projected to be less than this year, and the Fed continued to implement new policies that encourage lending. Will these positive steps be enough to overcome the increased uncertainty regarding new legislation as well as the continued pessimism among consumers or is the country entering a prolonged period of slow growth, high unemployment, and weak consumer confidence? Only time will tell. What do you think readers? Are you already seeing an improvement in your lives or are you still preparing for a financial Armageddon?

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:

Stephan Tavernini

Marketing Coordinator

Certified IAPDA Debt Arbitrator

Preferred Financial Services

stavernini@pfs1.net

Original Article:

http://news.yahoo.com/s/ap/20100723/ap_on_bi_ge/us_budget_deficit

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After seeing a sharp drop in new jobless claims in the week ending July 9th, the Labor Department released statistics for the week ending July 16th and the news isn’t what we were expecting. Last week, claims rose 37,000 to a seasonal average of 464,00 mostly due to seasonal factors but it also indicates continued weakness in the job market. A healthy economy generally has new claims below 400,000, a number not seen since before the depression begain in early 2008.

The Fed has indicated that the job market will continue to show signs of weakness and slow growth as the economy slowly recovers. The government is expecting the unemployment rate to remain above 9% for the rest of this year due to a variety of factors. Consumers continue to limit their spending which might be good for their personal finances but it is also slowing the economic recovery. The housing market continues to be depressed with no real positive oulook for the foreseeable future. Worst of all, businesses across the nation continue to limit their hiring because of all the uncertainty that is hanging over the economy. How will health care and the new financial bill impact businesses? Will the rising deficit hurt the US economy internationally? Did the eurozone escape its debt crisis? All of these questions are being asked not just by the Fed but also by business owners as they try and determine where the economy is heading over the next 12-18 months.

Stay tuned for more updates as they become available.

Stephan Tavernini

Marketing Coordinator

IAPDA Certified Debt Arbitrator

Preferred Financial Services

stavernini@pfs1.net

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Andover, Massachusetts July 16th 2010 — Although the headline grabbing 0.5% drop in June might seem to indicate we are heading towards another recession and more bad news, some good points can be taken if the data is analyzed more thoroughly. The commerce department released the retail spending data on Wednesday and the 0.5% drop follows a 1.1% drop in May. However, excluding auto sales, retail spending was only down 0.1%. In fact, if you take out gasoline purchases as well, which declined as gasoline prices dropped, consumer spending actually rose 0.1% in June. Although this data indicates at best flat consumer spending the economy will need to see robust consumer spending growth moving forward if we are to ever emerge out of this semi recession with high unemployment and sluggish industrial output.

Since consumer spending accounts for over 70% of the US economy it is a great indicator of where the economy is heading. Since the economy collapsed in 2008 consumer spending has been cut drastically and the continued slow growth is limiting the economic recovery that could be taking place. However, as auto sales plunged 2.3% in June the data is definitely skewed and is not giving an accurate report on consumer spending. In fact, department store sales rose 1.1% and general merchandise stores (Wal Mart) saw a .2% increase in June. Both of these sectors saw drops in May which indicates to the casual observer that while Americans continue to be hesitant  purchasing big ticket items such as vehicles they are returning to general stores and trying to resume their normal pre recession lives.

Moving forward, if we continue to see sluggish consumer spending growth, expect to see the economy head back towards a recession with dire consequences for the average American. As I have mentioned before, the best way to encourage consumer spending is to make sure that Americans are employed and have money to spend. By creating jobs and installing confidence in the job market, the US economy can recover and continue to move forward.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:

Stephan Tavernini

Marketing Coordinator

Certified IAPDA Debt Arbitrator

Preferred Financial Services

stavernini@pfs1.net

Original Article:

http://finance.yahoo.com/news/Retail-sales-drop-05-percent-apf-3335262562.html?x=0

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Andover, Massachusetts July 16th 2010 — The Better Business Bureau (BBB) has been at the forefront of protecting consumers from illegitimate companies that do not have the best interest of their clients in mind. They are a private company with branches throughout the USA whose primary responsibility is to foster trust between consumers and businesses by highlighting good performing companies and also exposing companies that are not living up to basic business standards in regards to fulfilling advertising promises, treating consumers fairly, and providing legitimate business services to their clients. To become a member of the BBB, companies have to pay the local chamber a yearly membership fee and pass certain standards to remain in good standing. This relationship between the companies being judged and the BBB has always been controversial and has only gotten more attention in recent years. Although it is commonly thought to be a neutral judge of private companies, recent developments highlight the growing concern over the dependability and neutrality of the BBB.

In 2009 the BBB implemented an F-A grading system for its affiliated companies with the goal of making it easier for consumers to judge a company. While the intention was good, the final outcome has been quite the opposite. The first issue consumers should have with this system is that only companies that pay to be recognized by the BBB and earn their approval can earn a grade of A+ severely diminishing their claims of neutrality. Secondly, the BBB has begun grading entire industries without looking at the individual companies. The BBB has recently announced that from now on all Debt Settlement Companies will be limited to a maximum score of C-, even if they had been recognized for their superior business practices and rewarded with certifications such as the BBB Accreditation and BBB Torch Award. While the debt settlement industry has issues to work out, the blanked grading of an industry is not only unfair to the individual companies but also to the consumers looking for help with their personal debt.

While there are bad apples among the debt settlement industry the legitimate companies offer another option for consumers looking to eliminate their debt. For some, bankruptcy, consumer credit counseling, and continuing their minimum monthly payments are not good options and that is where debt settlement can step in and help them. This blanket grading eliminates the chance for consumers to fairly judge a company based on its merits and work and instead lump every one of the 2000+ companies into one below average grade. To prevent this situation and to allow consumers to research and make up their own decisions on a particular company it is important that all consumers look past the arbitrary score given to a particular by the BBB. Instead, look at the # of complaints, how they were fixed, and how management has worked at improving the situation.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:

Stephan Tavernini

Marketing Coordinator

Certified IAPDA Debt Arbitrator

Preferred Financial Services

stavernini@pfs1.net

Original Article at www.usoba.org

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Andover, Massachusetts July 13th 2010 — After recently reading an article on Yahoo Finance about debt some key points stood out to me. For one, not even experts in personal finance always have the right answer. And two, most Americans definitely don’t know enough about personal finance to make the right decisions. The article went into great detail about the differences between good and bad debt. The factor that made a debt good was that it created wealth, such as student loans, home mortgages, etc. Bad debt was any debt owned by a consumer that loses value over time such as car loans and most other unsecured debts (credit card bills, personal loans). While there are good and bad types of debt, the distinction between the two can vary depending on who you ask.

The most shocking thing this article mentioned was taking out a HELOC (Home equity line of credit) to pay off your credit card bills. If you only look at the interest rates this would make sense, as a HELOC typically has interest rate below 10% while the average for credit cards is anywhere from 13%-18%. But, consumers need to look at more than just interest rates when considering whether to take on a new line of credit. A typical HELOC can be of various lengths with the typical being 15 and 30 years. So, when a consumer opens a HELOC for $15,000 to pay off an equal amount of credit card debt, they will be paying a lot more than just the initial $15,000. A $15,000 HELOC at an interest rate of 6.25% over 30 years would end up costing the consumer over $20,000 due to interest and finance charges. While this is a better scenario compared to using a credit card with a higher interest, it ignores another key factor. Consumer trends over the last decade indicate that even if they use a loan to pay off a credit card bill they generally do not change their spending habits. Without a change in spending habits the consumer will continue to create new credit card debt even while paying  monthly on the HELOC. The end result is a $15,000 HELOC that can last up to 30 years as well as a new credit card with a balance increasing each month. The key to becoming debt free is a change in spending habits. If you chose to get a HELOC to pay off your credit card bills, make sure that you also swear off new credit card debt. If you don’t, you will only be making your financial situation worse.

While this is an extreme example, much of the rest of the article is relatively accurate. In general, debt should be avoided at all costs as it always will cost you more than paying cash for anything. But, typically student loans and home mortgages are beneficial for the borrower. A better education can lead to a higher paying career in the future while home prices have increased by an average of 6.5% annually over the past 30 years. The exact opposite is true for most types of consumer debts. Car loans are for many Americans the largest debt they own besides their home. While a car is necessary for most, having a large car loan payment each month does not make sense. A vehicle loses value everyday you drive it, but the amount you owe only goes up as interest adds up over time. This is why I recommend taking the smallest loan possible out and purchasing a car with as much cash as possible.

The old belief that debt only affects your finances is no longer applicable in today’s post recession America. Your debt levels and payment history are direct factors along with your debt to income ratio and a few others that impact your credit score. While this score will definitely impact your financial decisions in the future it also impacts other aspects of your life. Many landlords and future employers use a credit report to determine the viability of the potential tenant or employee. Many insurance companies charge a premium for consumers with low credit scores while those with premier scores get a discount. As you can see, debt is a fact of life in America so make sure you know how it is impacting your life.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:

Stephan Tavernini

Marketing Coordinator

Certified IAPDA Debt Arbitrator

Preferred Financial Services

stavernini@pfs1.net

Original Article:

http://finance.yahoo.com/banking-budgeting/article/109993/good-debt-vs-bad-debt?mod=oneclick

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Andover, Massachusetts July 1st 2010 — As consumers continue to struggle with their debt burdens each month and the economy struggles to create jobs and wealth, the debt collection industry is seeing a rise in complaints filed by consumers. The debt collection industry has always been the leader in complaints filled against it, but the numbers continue to increase with the bad economy. During the boom years consumers had a way to pay off their debt as jobs and credit were plentiful. This meant that collectors didn’t have to resort to some of the extreme measures being taken now to collect on a debt. But now with the economy down and jobs scarce consumers are not paying up as easily or as frequently which has caused an alarming rise in illegal practices by debt collections agencies. The latest data for the year 2009 shows an increase of 50% to 67,550 complaints compared to the year prior. The FTC has also predicted that number to rise another 13% in 2010.

Although collectors have always been aggressive in the tactics many are now blatantly breaking the Fair Debt Collection Practices Act, which has been around since 1977.This act was meant to protect consumers from abusive, intimidating, and illegal behavior by debt collectors. Some of the complaints being filed include receiving calls before 8am and after 9pm, demanding more money than is owed, and threatening the client with consequences. All of these tactics are illegal under the Fair Debt Collection Practices Act but this has not stopped the agencies from employing them. The collection agencies know that people in debt have more pressing concerns than taking a collection agency to court so they continue to implement these illegal tactics in order to collect as much money as possible.

While most of these actions are physically harmless and more of an annoyance than anything else, there has also been a rise in physical threatening and violence against consumers. In 2009, 2517 complaints were filed in regards to collectors threatening or using violence against consumers, double compared to 2008. This type of behavior obviously can not be tolerated and consumers do have a way to fight back against illegal collections practices. Consumers can take collectors to court and sue them for any violations of the Fair Debt Collection Practices Act. This threat of legal action should in good economic times prevent these types of occurrences from happening but in today’s uncertain climate we expect to see a continued rise in complaints filed by the consumer against the collections industry.

Have you faced some of these illegal tactics by collectors? Have you filed a complaint with the FTC? More importantly, have you seen a rise in aggressive behavior since the economy headed down in early 2008? I’d love to hear from all of you that are currently dealing with collectors and stay tuned for a post on how to deal with collectors in the future!

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:

Stephan Tavernini

stavernini@pfs1.net

Original Article:

http://finance.yahoo.com/news/Debt-collectors-sock-it-to-cnnm-4156294800.html?x=0

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Andover, Massachusetts July 12th 2010 – As American consumers continue to struggle with mountains of debt and an uncertain job market their credit scores continue to be affected in a serious way. FICO Inc. has recently released a report detailing the breakup of the nearly 170 million Americans with a credit history and the numbers are quite sobering. Nearly 43.4 million Americans, almost 26% of consumers in America now have credit scores below 599, making them the riskiest group for lenders. People with scores this low are very likely to be rejected for credit cards, auto loans, mortgages, student loans, or any other kind of credit. And even if they are approved the terms they receive tend to be so expensive as to make the loan not worth it for the consumer.

This low score is impacting not only their personal finances but is also a reason the economic recovery is progressing so slowly. The US economy is dependent on consumer spending for a majority of its growth and as long as consumers don’t have access to affordable credit the economy will not recover to pre recession levels. In just the last two years, that group of lowest credit score holders has increased by 2.4 million and this number will only continue to rise as credit scores generally have quite a long delay between the action and a reflection on your score. For example, it can take over a year after your last mortgage payment before your home is foreclosed on and shows up on your credit report. To put this figure into historical context, the long term average for consumers with scores below 599 is around 15% of all consumers, 10% less than currently. While this is quite a frightening number, it is important to note that as little as three years ago American consumers had the most affordable access to credit in the nation’s history.

Reasons for this dramatic drop in credit scores are quite obvious but are only now starting to appear on credit scores. Currently 26 million Americans are unemployed, and the more these people rely on credit and fall behind on their bills, the lower their score will go. Every late and missed payment impacts your score, and for many their credit score is the first thing that drops when the hard times hit. The same goes for homeowners facing foreclosure. A consumer with a spotless record in the past can see their score drop by 150 points or more with a single home foreclosure. Clearly, until the macroeconomic circumstances can be addressed and fixed including falling home prices and stubbornly high unemployment, we should continue to see a rise in consumers who are in the least desirable 599 and below segment of the FICO score scale.

Luckily, there is some good news as well with this report released by FICO Inc. The number of Americans with scores above 800, the cream of the crop, has increased in the past few years. 17.9% of all consumers now have a score above 800, making them the safest bets for lenders. This is significantly above the long term average of 13%. While an exact reason for this can not be determined, it does show that more and more Americans are making their finances a priority. They have reigned in their spending, eliminated their consumer debt, and continue to save and invest their money to build a better future.

So readers, in which group are you? Have you seen your score drop over the past few years because of the economy, or are you actually improving your score by tackling your debt and becoming more educated about your finances?

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:

Stephan Tavernini

stavernini@pfs1.net

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