Unemployment taking toll on workers' credit scores

09.18.09
By Steve Monfort

A grim sign for many Americans struggling with credit card debt is a rising unemployment rate that in some states tops the national average.

A Bloomberg News report cites a recent survey of economists who believe the current nationwide rate of 9.7 percent will above 10 percent before the end of the year, regardless of recent steps toward an economic recovery.

The news service notes that California and Nevada now have record unemployment levels, with a respective 12.2 and 13.2 percent rate. The report also cited August unemployment rates that rose in 27 states.

Overall, a rising unemployment rate indicates that millions of Americans will end up with damaged credit scores as they fall behind on debts they simply cannot pay.

This has been reflected in credit card delinquency rates that have continued to go up in recent months, although at a somewhat slower pace. The number of first-time unemployment filings also remains higher than a healthy economy would normally sustain, further compounding the problem for workers in the longer term.

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Unemployment in many states will lead to cash problems for many consumers.