National Credit Default Rates Rise Slightly in September

Data through September 2014, released 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 an uptick in default rates. The national composite posted 1.04 percent in September, up three basis points from July 2014’s historical low. For the second consecutive month, the first mortgage default rate rose, to 0.93 percent in September. The second mortgage default rate rose one basis point to 0.52 percent, which was its first increase since April 2014. The bank card rate decreased for the third consecutive month, declining by 10 basis points to 2.63 percent.

“Default rates for bank cards reversed an increase seen in the first half of 2014 while defaults on first mortgages and auto loans appear to have bottomed out over the summer. However, none of these movements are very large,” said David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. “Despite their slight increase, default rates are still near the lows seen before the 2007-2009 recession and financial crisis.”

Chicago, Dallas, New York and Miami all reported rate decreases, with Miami posting a default rate of 1.21 percent, its lowest rate since June 2006 and New York posting a default rate of 1.05 percent, its lowest since September 2005. Los Angeles for the second consecutive month posted a rate increase of 0.77 percent, up 11 basis points from its historical low in July 2014. All five cities–Chicago, Dallas, Los Angeles, Miami and New York–remain below default rates seen a year ago.”