According to a study by BadCreditOffers.com, more than 100 million U.S. consumers now have a bad credit history, up sharply from 2007. This trend reflects a rising number of defaults on mortgages, auto loans, and credit cards by middle-class Americans, the study finds.

"As the cost of living has increased and incomes have remained relatively flat, Americans are finding it more difficult to meet their payment obligations," said TJ Smith of . "The result is an increased number of negative items reported on consumer credit histories and thus a growing trend toward bad credit."

The credit crunch of 2008 has also contributed to bad credit woes, Smith said. As banks and other lenders have restricted the approval of new lines of credit for consumers, those who have fallen behind on payments are now running out of options to keep up.

"In past years, someone who can't make their car loan payment might tap their home equity to stay current on their payment. But the subprime mortgage meltdown and resulting credit crisis has dried up those options, leaving the consumer with nowhere to turn for things like equity loans or ," Smith said.

The declining job market is another factor in the rise of bad credit, as the average American worker is experiencing shrinking income and fewer job opportunities, according to the study. The poor job market is especially affecting middle-class workers who typically perform the service-sector jobs hit hardest by the current recession.

While the rise in bad credit is more bad news for a struggling economy, it may get worse in 2009.

"This year saw an increase of about 10 percent in the number of Americans with damaged credit, perhaps as many as 110 million total according to our findings," Smith said. "But the underlying factors causing this increase, such as declining incomes and credit availability, figure to continue throughout 2009."

"We fully expect 2009 to be just as hard on the American consumer, if not worse."