Consumer credit defaults decline across all types of loans in September

Oct 22

Consumer credit defaults decline across all types of loans in September

As consumers become more solvent thanks to improvements in the national economy, they are focusing on paying off their monthly bills, according to the latest Consumer Credit Default Indices from Standard and Poor’s and Experian. The credit type that experienced the sharpest drop was second mortgages, which saw the rate at which consumers defaulted on them decline 10.83 percent from August to September, down to 2.13 percent. That rate is also 36.27 percent lower than the one from the same month last year.

Bank card defaults also declined considerably in September, the report said, down 10.53 percent from August to 7.04 percent overall, the report said. That rate is 13.29 percent lower than the one for September 2009.

“The S&P/Experian Consumer Credit Default Indices are showing declining default rates at the national level for all categories, including auto loan defaults which had risen over the previous two months,” said Craig Feldman, Standard and Poor’s Indices director. “All five of the highlighted cities are showing declines as well, with Miami and Los Angeles continuing to show the largest year-over-year drop in default rates, as has been the trend for the last three months.”

Miami’s year-over-year drop was steepest, as defaults in that city declined 40.3 percent in the last 12 months.

Many lenders have reported they observed fewer delinquencies and defaults on credit cards in the last year as the economy has slowly improved.

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