Press Release

Consumer Credit Default Rates Remain Near Recent Lows in August 2012 According to the S&P/Experian Consumer Credit Default Indices

 
 
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NEW YORK, Sept. 18, 2012 /PRNewswire/ -- Data through August 2012, released today by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed that most loan types saw a decrease in default rates including the national composite, which is now down for eight consecutive months.

Four of the five loan types posted their lowest rate since the end of the 2007/2009 recession. Only the auto loan default rate increased, from 1.01% in July to 1.09% in August. The bank card default rate fell the most in August, from July's 3.83% to 3.77%. The first mortgage default rate decreased slightly from 1.41% in July to 1.40% in August. At 0.72%, the second mortgage default rate fell to the lowest in its eight-plus year history. The composite index showed a post-recession low of 1.50%, slightly below July's 1.51%.

"While continuing to fall, most of the August changes in default rates were small compared to what we saw in the first half of the year," says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. "As the consumers' financial condition continues to improve their credit default rates showed small changes from July to August, in most cases the trend was either down or flat.

"The auto loan rate rose eight basis points in August to 1.09%, but this was from July's eight-plus year historic low. Bank card, first and second mortgage and composite default rates hit new post-recession lows. The first mortgage default rate has been down or flat for eight consecutive months, a good sign for the housing market. Second mortgage default rates were down in all but one of those same months. Bank card default rates fell the most in August, down six basis points to 3.77%, its lowest rate since February 2007, more than five years ago.

 

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