Let’s say I am a totally average American. Average income, assets, etc. What is the average amount of credit that would be available to me? Ideally this would include stuff like personal loans between family members, though I imagine that data might be hard to find.
Secured or unsecured?
I realize this isn’t exactly what the OP had in mind. It’s the best I could find:
Sorry, can’t help but offer the obvious answer, in light of current economic conditions:
TOO much. :dubious:
and before the current unpleasantness - WAY TOO much.
One problem I have with the current efforts to revive the credit markets is that we don’t WANT to go back to the freespending days. We want credit to be available, but available credit needs to be related to credit risk. The fact that the two became divorced is the core reason for the credit crunch.
Anecdotally, I know someone who got really close to Gfactor’s limit: about $17,000 in credit card debt by the time he graduated from university. Guy is one of those people who take incredible risks and manages to turn up smelling like roses. He taught himself database programming as an outgrowth of the design and engineering courses he took and managed to create his own business. Paid off the debt in a couple of years.
The credit cards were taken out as a kind of contest with a buddy. They wanted to see how much credit a college student could actually get. Turns out that you can get around $20,000. His total was $22,000 or so. This was about 10+ years back.
An old quote from an old friend of mine, “This is America. You can go as far in debt as you want.”
I laughed when I heard it, many, many years ago. It turns out it was oh, so true but now it’s not so funny.
Read this article. It’s long but worth it.
For unsecured debt -
I have about my annual salary in available credit. Used to be about 1.5x my annual salary, then the banks started to fail and my limits dropped.
Doesn’t matter to me, of course. I’ve never gone above a few thousand in in credit debt.
As for secured credit? I had no trouble whatsoever in getting half my annual income for an auto loan about two years ago (no cash up front). I was also able to get approved about one month ago for just under 4x my annual income for a 30-year mortgage (again, no cash up front.)
My credit score is very good. I suspect it would be a bit less these days for someone with a ding or two on their credit rating. But who knows? The modern American economy was built on shady credit offerings.
Wouldn’t it be too **little **nowadays?
A few years back, I made some mistakes… and then some more mistakes financially.
I tried to borrow my way out, and come up with a recovery plan… I eventually wound up filing Chapter 7, however, under the old law.
I was able to get about $65K in unsecured debt, with medium-good credit and an annual income in the $40K range.
Missed the edit window:
This would have been circa 2004 or so.