The 2008 financial collapse and ensuing recession did a number on consumer credit reports. While lenders leveraged background checks and credit reports
to inform their credit decisions
, consumers suffered higher debt and limited credit availability in the months that followed. According to a report released this week by FICO, roughly 50 million Americans saw their credit score plummet by more than 20 points between 2008 and 2009. Some 21 million of those individuals saw a dip of more than 50 points. At the same time, the study found, lenders tightened their standards for credit approvals. Surprisingly, however, consumers with strong credit scores appear to have been the hardest hit, due largely to adverse conditions in the housing market. Foreclosure rates are only beginning to taper off. "Earlier FICO studies found that the deepest score declines … have been among borrowers who ranked among the credit elite," reports Kenneth Harney for the Washington Post. "Homeowners with scores in the high 700s may have lost as much as 130 points when they fell behind by three months or more on loan payments."