S&P/Experian Credit Default Indices Continue to Show Declining Default Rates

Data through March 2011, released this week by S&P Indices and Experian for the S&P/Experian Consumer Credit Default Indices — a comprehensive measure of changes in consumer credit defaults — showed a decline in monthly default rates across all credit lines. First and Second Mortgage indices declined to 2.33% and 1.42%, from 2.45% and 1.46%, respectively. The Bank Card index experienced the smallest decrease to a 5.59% default rate, while Auto Loans had the largest decrease to 1.47%.

“Modest declines in consumer credit default rates continue across all major sectors as consumers gradually rebound from the financial crisis of two years ago,” said David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. “Recent data from the Fed confirms a continuing decline in mortgage debt outstanding and a small increase in non-mortgage consumer debt driven by auto and similar loans. Bank card credit outstanding is declining.  The declining debt levels, combined with the economic recovery, are supporting lower defaults and a gradual improvement in consumers’ financial condition. This positive trend should help maintain the recovery.”

Consumer credit defaults varied across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas (MSAs) reported in this release each month, Los Angeles experienced a modest increase in defaults in March to 2.73%, from 2.70% in February. Miami and New York lead the way with largest decrease in defaults rates to 5.33% and 2.26%, from 6.05% and 2.53%, respectively. Dallas default rates declined to 1.65% and Chicago default rates decreased to 2.63%.

The table below summarizes the March 2011 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 March 2011

Jointly developed by Standard & Poor’s 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 accurately 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.