The Money Godmother's Blog

Credit, credit, credit.

We hear a lot about credit and debt, creditworthiness, credit history, credit scores. Just how are Americans handling the changing credit scene? It seems consumer credit behavior is steady.

FICO, the agency that many organizations turn to for credit scoring, has done some research on what’s happening with credit scores since the economic downturn. There are almost as many Americans with improving credit scores as there are Americans with declining scores.

Most bank risk managers surveyed by FICO in the third quarter of 2011 were pessimistic. Those surveyed anticipate more consumers will be delinquent with residential mortgages, auto loans, credit cards, and student loans.

According to FICO, consumers whose credit scores dropped recently are much different than those whose scores dropped early in the economic crisis. Mortgage pressures were not as much of a factor in severe delinquencies than formerly assumed.

FICO research shows “consumers who defaulted after 2008 look more like good consumers than those who defaulted between 2005-2007. They were on the books longer, had fewer months of minor delinquency prior to the default, and have higher scores even after the default. They also defaulted for more money: The average balance on defaulted accounts in 2008-2010 was $5,543 compared to $4935 in 2005-2007.”

Free shipping.

It’s one of consumers’ favorite holiday promotions. And, according to the National Retail Federation’s (NRF) recent survey, 9 out of 10 retailers plan to tap that craving. If shipping is free, it appears about 36% of us will spend more online. So retailers are also boosting their online presence to gain favor with consumers who are  shopping more online.

To that end, the survey reveals that consumers will use social media to get information about sales and promotions–about 29% will check a retailer’s Facebook page, and about 65% will read customer reviews on the company website.

So many more retailers–51%–said they have invested significantly in optimizing their websites, and 35.3% are using QR codes in offline advertising, such as magazines. Nearly 75% beefed up Facebook and Twitter accounts in advance of the holiday rush, according to the NRF survey of 1,685 consumers conducted by BIGresearch.

According to Pam Goodfellow, Consumer Insights Director, BIGresearch, “These days, most people want to shop around all season long, using their smartphones to scan items in stores and compare prices, retailers’ websites to find store locations to scope out gift ideas, and tablets or laptops to shop from the convenience of their home.”

(NRF is the world’s largest retail trade association, representing all types and sizes, including chain restaurants in the U.S. and more than 45 countries.)