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National Default Rate Stable

Christine DiGangi

Consumer credit default rates remain at low, pre-recession levels, according to the S&P/Experian Consumer Credit Default Indices. The indices, released monthly, measure changes in the default rates among credit card accounts, auto loans, and first and second mortgages in five major metro areas.

The percentage of loans in default among all those consumer credit products (known as the national composite default rate), stayed the same from September to October at 1.38%, an improvement from last October’s 1.55%. The U.S. had similar rates before the financial crisis.

The report shows minimal month-to-month default rate changes among individual products — first mortgages went up slightly from 1.28% to 1.30%, and second mortgages increased from 0.69% to 0.72%. Credit card delinquencies declined the most, but the change from a 3.14% default rate to 2.97% was small, considering the rate was 3.68% last October. Auto loan defaults barely budged, from 1.15% in September to 1.14% in October, which is consistent with the rate in October 2012.

Among the five metropolitan statistical areas covered in the report — New York, Chicago, Los Angeles, Dallas and Miami — Los Angeles and Dallas saw their composite default rates tick up since last month, New York and Chicago saw declines and Miami held steady, maintaining its 2.11% default rate from September. Miami has regularly had the highest composite default rate among the five MSAs.

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