Credit Karma (www.creditkarma.com), the consumer’s credit advocate, today released its U.S. Credit Score Climate Report with trend data for April 2010. Nationally, credit scores have remained stable as consumers begin to pay down seasonal spending and the economy begins its recovery. In April, the average consumer had a credit score of 670, up just one point since the beginning of the year.
On another positive note, credit card debt amongst consumers with a credit card decreased 4% in April to its lowest level in 2010; however, credit card debt is still 16% higher than the 2009 low of $6,641. Additionally, Consumers in the San Diego Metropolitan Statistical Area (MSA) showed the biggest decrease in credit card debt by paying down 10% of the balance on their credit cards to $6,464. The Miami MSA came in second with an 8% decrease in credit card debt to $6,640. In terms of states, consumers in West Virginia and Idaho decreased the balances on their credit cards by 8% and 9% respectively.
In April, the average consumer with an open account had:
- $7,701 in credit card debt
- $177,186 in home mortgage loans
- $50,889 in home equity
- $14,873 in auto loans
- $27,777 in student loans
In addition, this month, Credit Karma begins to disseminate the monthly changes in the credit climate by illustrating the differences in each credit score range. In April, Credit Karma compared 100,000 credit files to look at the correlation between total debt (the sum of all open and closed outstanding debt in a consumer’s credit report) and credit score, as well as on time payment history.
| Credit Score | Total Debt | % on time |
|---|---|---|
| <500 | $40,652 | 59.55% |
| 500-599 | $42,883 | 74.19% |
| 600-699 | $92,029 | 95.72% |
| 700-799 | $126,646 | 99.47% |
| 800 | $55,442 | 99.99% |
“While many people assume you have to get into debt to have good credit; the reality is that only people with good credit get can get loans and you see it in this data,” said Ken Lin, CEO of Credit Karma. “People with credit scores lower than 500, often have debt that is either delinquent or in collections. People with scores above 800 have less total debt that those at 600 and 700, illustrating you don’t need debt to have perfect credit.”
Here are some other key findings:
- Consumers in Minnesota had the biggest increase to their credit scores with credit scores improving by four points in April 2010 to 684.
- Despite a one point increase, consumers in Kentucky still have the lowest credit scores in the nation. The average credit score in Kentucky is 648.
- Consumers in Mississippi have the least amount of credit card debt. On average, consumers with a credit card have $6,272 in credit card debt.
Methodology
Each month, the Credit Karma U.S. Consumer Credit Score Climate Report compares the current credit scores of its user base with previous scores pulled at least 30 days prior and no more than 90 days prior to the stated month. This month’s report includes a comparison of more than 114,400 Credit Karma user scores.
About Credit Karma
Credit Karma enables consumers to put their credit to work for their overall financial health. Credit Karma’s goal is to help its more than 1 million users realize the everyday cost savings of having a good credit score by providing a range of tools and resources to help consumers improve their financial situation. For more information, visit www.creditkarma.com.