Credit scores turned into one ugly number for many consumers throughout the recession — putting a halt to how much buying and borrowing consumers could do.
So it's upbeat news to hear that more consumers are edging near perfect FICO scores.
The number of consumers in the top FICO score range — 800 to 850 — is now at the highest level since October 2008, according to researchers at FICO Labs.
About 18.3 percent of consumers are at the head of the class in credit scores.
More good news: Consumers with very troubled credit are edging upward, too, and working past some of their darkest days.
Todd Albery, CEO of Detroit-based Quizzle, a credit-information website that's part of the Quicken Loans family, said research shows credit scores are on the rise, too — a good indicator that the economy is improving, even if slightly.
Many consumers are working hard to pay off their debts on time and also not using credit to make crazy purchases.
Various economic measurements — including the household debt-service and financial-obligation ratios — show consumers are in better shape to borrow money, too, said Paul Traub, business economist for the Federal Reserve Bank of Chicago's Detroit branch.
Some people who have regained jobs are better able to pay their bills.
“Their scores are improving because they're now demonstrating consistent payment behavior,” said Rachel Bell, senior director of global scores and analytics for FICO Labs.
For others, time has helped. Old delinquencies become less serious credit dings than more recent late payments.
Albery, at Quizzle, noted that as negative items approach the two-year-old mark, they have significantly less impact on scores. Now, more than half of all Americans have FICO scores between 700 and 850.
It's not all bad, but it's not all good, either.
About 15.5 percent of consumers have a score between 700 and 799, but that segment is not rebounding — indicating that not all consumer credit health is back to the pre-recession level, FICO researchers noted.
The percentage of consumers in that group from 700 to 799 is at the lowest level since 2005 when FICO began tracking this information.
FICO Labs found that 31.9 percent of Americans with FICO scores were in the 550 to 699 range — which makes it hard to get credit at reasonable rates.
Overall, though, lenders appear to be more optimistic about the likelihood of being repaid.