S&P/Experian Index Shows Default Rates Decline Across All Credit Lines

Data through September 2010, released today by Standard & Poor’s 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 for all credit lines. First and second mortgages declined in September to 3.0% and 2.1% respectively. Auto loans decreased slightly from 2.1% in August to 2.0% in September. Bank cards had the largest decline in defaults in the past 12 months down to 7.0%.

“The S&P/Experian Consumer Credit Default Indices are showing declining default rates at the national level for all categories, including auto loan defaults which had risen over the previous two months,” says Craig Feldman, Director at S&P Indices. “All five of the highlighted cities are showing declines as well, with Miami and Los Angeles continuing to show the largest year-over-year drop in default rates, as has been the trend for the last three months.”

Consumer credit defaults vary across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas reported each month in this release, Los Angeles had the largest decrease in defaults, for the second month in a row, of 13.8%, followed by Dallas which declined by 9.83%. New York and Chicago experienced a modest decline of 5.23% and 4.84% respectively. Miami continues to decline by 40.30% in the last 12 months.

The table gives summary results for September 2010 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: September 2010

The second table provides the S&P/Experian Consumer Default Composite Indices for five selected metropolitan statistical areas:

Source: S&P/Experian Consumer Credit Default Indices

Data Through: September 2010

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.