Consumer Credit Default Rates Remain Near Recent Lows in August 2012 According to the S&P/Experian Consumer Credit Default Indices

NEW YORK, Sept. 18, 2012 /PRNewswire/ -- Data through August 2012, 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 that most loan types saw a decrease in default rates including the national composite, which is now down for eight consecutive months.

Four of the five loan types posted their lowest rate since the end of the 2007/2009 recession. Only the auto loan default rate increased, from 1.01% in July to 1.09% in August. The bank card default rate fell the most in August, from July's 3.83% to 3.77%. The first mortgage default rate decreased slightly from 1.41% in July to 1.40% in August. At 0.72%, the second mortgage default rate fell to the lowest in its eight-plus year history. The composite index showed a post-recession low of 1.50%, slightly below July's 1.51%.

"While continuing to fall, most of the August changes in default rates were small compared to what we saw in the first half of the year," says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. "As the consumers' financial condition continues to improve their credit default rates showed small changes from July to August, in most cases the trend was either down or flat.

"The auto loan rate rose eight basis points in August to 1.09%, but this was from July's eight-plus year historic low. Bank card, first and second mortgage and composite default rates hit new post-recession lows. The first mortgage default rate has been down or flat for eight consecutive months, a good sign for the housing market.  Second mortgage default rates were down in all but one of those same months. Bank card default rates fell the most in August, down six basis points to 3.77%, its lowest rate since February 2007, more than five years ago.

"Miami's default rate rose from July's post-recession low -- 2.62% in August, up from July's 2.39%. Dallas' and Chicago's rates also rose in August, to 1.07% and 1.92%, respectively. This was the second month that default rates rose in Dallas, but 1.07% is still the lowest of the five cities we publish. Los Angeles was the only city where the default rates fell in August; 1.60% versus July's 1.67%, a post-recession low for that city. New York remained flat at its 1.49% post-recession low.

"While there has been a bit of volatility among loan types and cities, the basic trend has not changed.  Consumers are continuing to repair their balance sheets, as evidenced by diminishing default rates.  For the housing market, there are still a substantial number of loans outstanding that defaulted in the past and that segment of the market is still of concern.  But for 2012, the drop in mortgage default rates is a good sign for the housing market and the consumer."

The table below summarizes the August 2012 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:

                       
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About Experian

Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2011 was $4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil.

For more information, visit http://www.experianplc.com.

Experian and the Experian marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.

For more information:
Dave Guarino
Communications
S&P Dow Jones Indices
[email protected]
212-438-1471

David Blitzer
Managing Director and Chairman of the Index Committee
S&P Dow Jones Indices
[email protected]
212-438-3907

Susan Henson
Experian Public Relations
[email protected]
714-830-5129

Jointly developed by S&P Indices 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.

For more information, please visit: www.consumercreditindices.standardandpoors.com.

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SOURCE S&P Dow Jones Indices

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