The following is an excerpt from Kathy Kristof | August 22, 2012 | cbsnews.com |
(MoneyWatch) It wasn’t that long ago when consumers appeared to be down for the count, defaulting on their mortgages, filing bankruptcy in droves, relying on the government for unemployment checks and suffering with steadily declining net worth. Now, for the first time in nearly four years, the bulk of the nation is fighting its way back to health, according to CredAbility’s Consumer Distress Index.
Consumer net worth has ticked up; late payments on mortgages have hit a three-year low and the U.S. savings rate is climbing, according to the index. That’s brought the index score to 71.3 in 2012′s second quarter – up a compelling 4.6 points over the past year.
Recovery is uneven, however, with residents of some states and cities faring considerably better than others. Residents of Boston and Washington, D.C., are in the best shape, while residents in Detroit and several parts of Florida and California remain economically distressed, according to the index compiled by CredAbility, a credit counseling and education service.
And despite the improvement, this is far from a rosy report.
Scores below 70 are a sign of financial distress, according to CredAbility. The current rate would barely make a “C” grade in school and still indicates that economic health is tenuous. However, it’s a major step forward from the distressing state of economic health three years ago, when virtually no state was spared.
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