Experian: Credit Default Rates Remain Near 12-Year Lows

The S&P/Experian Consumer Credit Default Indices for July showed slight upticks in both overall credit defaults and first mortgage default rates, although well historic highs.

The report showed a composite rate of 0.83 percent in July, up one basis point from June. The first mortgage default rate reported was 0.66 percent in July, up one basis point; auto loan defaults recorded a 0.93 percent default rate, up two basis points from June; the bank card default rate came in at 2.92 percent down 19 basis points from June.

“Consumer credit default rates remain close to 12-year lows amidst moderate growth in spending and incomes,” said David Blitzer, Managing Director and Chairman of the Index Committee with S&P Dow Jones Indices. “The consumer economy is growing with few significant difficulties in accessing credit.

Four of the five major cities surveyed saw their overall default rates decrease during July. Chicago recorded a default rate of 0.89 percent, down 12 basis points. New York reported a default rate of 0.77 percent, down six basis points from June. Dallas’s default rate decreased five basis points from June (0.69 percent). Los Angeles reported a default rate of 0.63 percent, down four basis points from June. Miami’s default rate increased for the fifth consecutive month, up six basis points to 1.37 percent.

“Delays in spending are likely to limit the growth in consumer and corporate debt, avoiding substantial increases in default rates in the near term,” Blitzer said.