Nearly all types of consumer credit experienced declines in the rate of default during March, according to the S&P/Experian Consumer Credit Default Indices.
Nearly all types of consumer credit experienced declines in the rate of default during March, according to the S&P/Experian Consumer Credit Default Indices.
During the third month of the year, the national composite default rate dropped to 1.96 percent from February's level of 2.09 percent, the report noted. The first mortgage default rate slipped from 2.02 to 1.88 percent on a monthly basis. Meanwhile, the default rate for second mortgages fell to 1.03 percent, sliding down marginally from a month earlier, and the auto loan rate decreased from 1.22 to 1.11 percent month-to-month.
The only loan type to see its default rate rise from February were bank card loans, which jumped from 4.41 to 4.47 percent.
"Not only have we resumed the downward trend in consumer default rates that began in the spring of 2009, but we appear to be reaching new lows across most loan types," said managing director and chairman of the Index Committee for S&P Indices David M. Blitzer. "The first three months of 2012 show broad based declines in default rates with first and second mortgage, auto and composite default rates all reaching post-recession lows."
Four of the five of the metropolitan statistical areas surveyed by S&P and Experian - New York, Chicago, Dallas and Miami - all experienced drops in their default rates in March. Los Angeles' went up slightly month-to-month.
Though the default rate in Miami remains high at 3.62 percent, Blitzer stated it's at its lowest point since the recession, and is well below the rate of 5.33 percent recorded in March 2011.
Dallas had the lowest default rate of all MSAs surveyed at 1.44 percent - down from 1.61 percent in February and 1.65 percent the year before, according to the indices.
Improvements in payment habits could lead to rises in credit scores for many of the nation's consumers as they better their personal financial situations.
