National Credit Default Rates Hit a Post-Recession Low in June

Data through June 2013, released today by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, showed decreases in national consumer credit default rates during the month. Both national composite and the first mortgage default rates hit new post-recession lows.

The national composite default rate was 1.34% in June, down from 1.42% in May. The first mortgage was 1.23% in June, down from 1.31% posted last month. The second mortgage posted 0.54% in June, the lowest rate in the history of the index. It was down from 0.60% posted in May. The bank card rate was 3.41% in June vs. 3.63% in May.  The auto loan default rate hit a new low in June posting 1.00%; it was marginally down from its 1.04% May level.

“Consumers’ financial condition continues to improve,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. “Across all categories default rates are falling. The first mortgage hit a new post-recession low of 1.23% in June. Bank card default rate was 3.41%, 22 basis points down from last month. The second mortgage and auto loan default rates hit new lows of 0.54% and 1.00% since the indices began in 2004. All loan types remain below their respective levels a year ago.

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.