National Credit Default Rates Decreased in August 2013

Data through August 2013, 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 decrease in national default rates during the month.

The national composite was 1.34% in August, marginally down from 1.35% in July. The first mortgage default rate was 1.23% this month, down from 1.25% posted last month. The second mortgage posted 0.57% in August, up from 0.54% July rate. The auto loan default rate reported 1.11% in August, up from a 1.03% previous month’s level. The bank card rate hit a new low of 3.12% in August; it was 3.22% in July.

“Consumer credit quality continues to look healthy,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. “The indices are back to pre-financial crisis levels and are stable. The national composite and the first mortgage posted recent lows in August; they were 1.34% and 1.23%, marginally down from the last month’s rates. The second mortgage posted 0.57%, three basis points up from July low. Auto loan default rate was 1.11%, eight basis points up from the last month. Bank card default rate hit a new low of 3.12%, ten basis points down from July level and 65 basis points down from the level posted in August 2012. All loan types remain below their respective levels a year ago.

“Two cities, New York and Los Angeles, saw their default rates drop in August while three cities – Chicago, Dallas and Miami – saw increases. All moves were small. All five cities remain below default rates they posted a year ago, in August 2012.”

The table below summarizes the August 2013 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

Source: S&P/Experian Consumer Credit Default Indices
Data through August 2013

Jointly developed by S&P Dow Jones Indices LLC and Experian, the S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month at 9:00 am ET. They are constructed to track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien. The Indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month. Experian’s base of data contributors includes leading banks and mortgage companies, and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders. For more information, please visit: www.consumercreditindices.standardandpoors.com.