Experian Notes Declining Credit Default Rates

Defaultrnrates for most types of consumer loans were down slightly in February comparedrnto January and in every case were substantially below levels of February 2012.  The composite S&P Experian NationalrnConsumer Credit Default Index was 1.55 percent in February, down from 1.63rnpercent in January and 2.09 percent in February of last year.  </p

Amongrnthe individual loan indices only second mortgage and auto loan defaults werernhigher in February than in the previous month and those moved up onlyrnmarginally.  Auto loans were at 1.11rnpercent compared to 1.10 percent in January and second mortgages rose two basisrnpoints to 71 percent.  Second mortgagesrnhad a default index of 1.20 percent and auto loans 1.22 percent in Februaryrn2012. </p

Thernfirst mortgage default rate fell from 1.58 percent in January to 1.48 percentrnin February.  That rate was at 2.02rnpercent a year earlier.  Bank cards had arnrate of 3.37 percent, down from 3.41 percent in January and 4.41 percent inrnFebruary 2012.   </p

“Consumer credit quality remains healthy”, says David M. Blitzer, Managing Director and Chairmanrnofrnthe Index Committee for S&P Dow Jones Indices. “These trends are consistent with other economic news – improvements in employment and overall economic activity and continuing gains in housing. Additionally, foreclosure activity continues to declinerneven though it remains at elevated levels compared to the period before the financial crisis.</p

Inrnadditional to the national indices Experian tracks five major cities all ofrnwhich have improved in their composite default rates since February 2012.  Compared to January New York was down 12rnbasis points, Los Angeles 18 basis points, and Miami 24 although Miami had byrnfar the highest rate at 3.21 percent. rnChicago ticked up one basis point to 2.08 percent and Dallas rose fromrn1.19 percent to 1.26 percent. 

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