Number of the Week 25%

25%: The share of Americans with a credit score of less than 600

The United States may still have a triple-A credit rating, but the creditworthiness of the people who live there has fallen sharply amid the housing bust and recession. In an economy where credit plays a central role, that presents a significant obstacle to recovery.

Over the past couple years, millions of Americans have reneged on their debts — because they lost their jobs, because they took on more than they could handle, or both. For many, those defaults have brought immediate financial relief, leaving more cash to spend on other things. Now, though, they’ll also have to face the challenge of living with bad credit.

As of April, 25% of Americans had fallen into the least-creditworthy category, garnering a rating of less than 600 from FICO, the main arbiter of consumer credit in the U.S. That compares to only 15% before the recession, according to data compiled by Deutsche Bank.

The main upshot is that, given the disappearance of subprime lending, one in four Americans won’t be able to borrow money to make a major purchase in the foreseeable future. Some may be able to get mortgage loans through Federal Housing Administration programs, which allow for credit scores as low as 580. But none will qualify for loans guaranteed by Fannie Mae or Freddie Mac, which account for the lion’s share of the market and typically require credit scores of at least 650. Getting auto loans or credit cards will also be tough.

Perhaps as significant, though, is the way bad credit can slow the reshuffling of people and jobs around the country that typically accompanies any recovery.

Landlords, for example, have traditionally avoided prospective tenants with FICO scores below 600, a fact that presents an obstacle for people with bad credit who want to move for work — including so-called strategic defaulters who walk away from mortgages they could otherwise afford. Many landlords in areas hardest hit by the housing bust are showing leniency toward tenants with foreclosures in their credit histories, but it’s still a black mark that requires added effort to mitigate.

Employers, too, often look at applicants’ credit, though the importance of the score can depend on the line of work. In a January 2010 survey, the Society for Human Resource Management found that about 60% of employers require a credit check of some or all candidates.

Rebuilding a credit rating can take anywhere from three to seven years. In the meantime, many Americans will be stuck in a sort of Catch-22: The bad credit brought on by the recession will make it more difficult for them to work their way out of it.