Quality consumer credit scores more valuable than ever

When a consumer credit report displays a high score, it's a sign to lenders that a person is trustworthy and responsible with his or her money. Forbes reports that in an effort to improve delinquency rates, many credit card companies have tightened their lending standards, making it more difficult for those with bad credit to obtain a new card. However, those with good or excellent credit are being strongly courted by these companies, as such people tend to spend more and aren't as great of a default risk. Defaults in general have been down in August, according to Moody's Credit Card Index. For the month, 3.04 percent of balances were 30 days or more overdue. This is an improvement from July, and marks the 22nd consecutive month in which delinquency rates have dropped after reaching an apex of 6.23 percent in October 2009. Furthermore, charge-offs - debts banks write off as uncollectable - improved to 6.04 percent, a rate the analytics company expects to drop below 4 percent by the end of 2012. Moody's Investors Service recently considered upgrading General Motor's credit rating due to its expected contract ratification with the United Auto Workers Union as well as its finance improvements, Bloomberg BusinessWeek reports.