Across the country, consumers are moving out of the subprime credit score category
Number of consumers with Equifax credit scores below 620 declines in 24 of the top 25 metro areas
ATLANTA, Jan. 31, 2013 /PRNewswire/ -- The number of consumers with subprime credit scores is shrinking across the country, according to new data from Equifax. The total number of consumers with Equifax credit scores below 620 fell 2.1%, or by about 1 million consumers, in the third quarter of 2012 versus the third quarter of 2011. The overall share of consumers with Equifax credit scores under 620 fell by 0.7% (from 25.9% to 25.2%) during that same period.
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The trend is playing out to varying degrees in different metropolitan areas, with Chicago seeing the largest decline in consumers with Equifax credit scores below 620. In the Chicago-Gary-Kenosha metro area, 1.5 million consumers had a credit score of 619 or below in the third quarter of 2012, a 9 percent decline from the same quarter in 2011.
On the other end of the spectrum, Houston is the only metro area among the top 25 that had an increase in consumers with Equifax credit scores below 620, with a 0.6 percent increase in the number of consumers in the lowest category when compared to the same period in 2011. However, when accounting for population growth in Houston, the percentage of the Houston population with subprime credit scores fell by 0.5 percent.
Credit scores below 620 are considered subprime for the purposes of this report. A consumer with an Equifax score below 620 likely will have a harder time securing credit from a bank or other lender and may have to pay a higher interest rate if a loan is secured.
"Consumer credit scores are improving in most major metropolitan areas," said Trey Loughran, president of the Personal Solutions division at Equifax. "The job market is improving and time is starting to heal the wounds of the Great Recession."
The geographic differences can be attributed to a number of factors, including employment, population shifts and demographic changes. For instance, in Chicago, the unemployment rate declined 1.5 percentage points to 8.8 percent – the fifth best improvement in unemployment among the largest 25 metro areas. Also, there are significant improvements in early housing-bust markets such as San Francisco, Sacramento, San Diego, Los Angeles, Las Vegas, Phoenix and Miami, where people's credit scores are starting to recover after foreclosures.
"It is nice to see that over 1 million people across the country have moved out of the below 620 range," said Loughran. "We are seeing a trend of consumers being careful and disciplined about their use of existing credit while also being cautious about using new accounts they have opened."
Top 25 Metro Markets: Number of Consumers with Equifax Credit Scores Below 620
Q3, 2012 vs. Q3, 2011
| Total 619 & Below |
Total 619 & Below |
% Change |
||
| Top 25 Metropolitan Statistical Areas |
Q3, 2011 |
Q3, 2012 |
||
| 1 |
New York-Northern New Jersey-Long Island NY-NJ-CT-PA |
3,306,563 |
3,248,660 |
-1.8% |
| 2 |
Los Angeles-Riverside-Orange County CA |
3,326,552 |
3,149,559 |
-5.3% |
| 3 |
Chicago-Gary-Kenosha IL-IN-WI CMSA |
1,688,835 |
1,536,648 |
-9.0% |
| 4 |
Washington-Baltimore DC-MD-VA-WV CMSA |
1,545,133 |
1,528,358 |
-1.1% |
| 5 |
San Francisco-Oakland-San Jose CA CMSA |
984,035 |
920,594 |
-6.4% |
| 6 |
Philadelphia-Wilmington-Atlantic City PA-NJ-DE-MD CMSA |
1,178,359 |
1,164,211 |
-1.2% |
| 7 |
Dallas-Fort Worth TX CMSA |
1,418,294 |
1,373,994 |
-3.1% |
| 8 |
Boston-Worcester-Lawrence MA-NH-ME-CT CMSA |
848,824 |
837,057 |
-1.4% |
| 9 |
Houston-Galveston-Brazoria TX CMSA |
1,288,945 |
1,296,214 |
0.6% |
| 10 |
Detroit-Ann Arbor-Flint MI CMSA |
1,160,113 |
1,137,517 |
-1.9% |
| 11 |
Atlanta GA MSA |
1,289,238 |
1,275,933 |
-1.0% |
| 12 |
Miami-Fort Lauderdale FL CMSA |
1,137,305 |
1,102,803 |
-3.0% |
| 13 |
Phoenix-Mesa AZ MSA |
850,651 |
819,090 |
-3.7% |
| 14 |
Seattle-Tacoma-Bremerton WA CMSA |
602,351 |
596,029 |
-1.0% |
| 15 |
Minneapolis-St. Paul MN-WI MSA |
438,838 |
428,367 |
-2.4% |
| 16 |
San Diego CA MSA |
509,449 |
482,219 |
-5.3% |
| 17 |
Denver-Boulder-Greeley CO CMSA |
434,798 |
428,726 |
-1.4% |
| 18 |
Cleveland-Akron OH CMSA |
520,970 |
518,758 |
-0.4% |
| 19 |
Tampa-St. Petersburg-Clearwater FL MSA |
647,248 |
642,954 |
-0.7% |
| 20 |
St. Louis MO-IL MSA |
493,859 |
486,388 |
-1.5% |
| 21 |
Portland-Salem OR-WA CMSA |
404,681 |
400,684 |
-1.0% |
| 22 |
Pittsburgh PA MSA |
375,265 |
369,091 |
-1.6% |
| 23 |
Las Vegas NV-AZ MSA |
512,930 |
490,759 |
-4.3% |
| 24 |
Sacramento-Yolo CA CMSA |
371,947 |
348,953 |
-6.2% |
| 25 |
Orlando FL MSA |
528,232 |
521,646 |
-1.2% |
About Equifax
Equifax Personal Solutions empowers consumers with the confidence and control to be their financial best. Find out more about Equifax's innovative suite of credit monitoring and identity theft protection products designed to enable consumers to maximize their financial well-being at www.equifax.com. Get smart information on everything from credit to retirement, all in one place at the Equifax Finance Blog, www.blog.equifax.com.
Equifax is a global leader in consumer, commercial and workforce information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers. Headquartered in Atlanta, Equifax operates or has investments in 18 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com.
SOURCE Equifax
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