Credit Karma (www.creditkarma.com), the consumer’s advocate for demystifying credit, today released its U.S. Credit Score Climate Report with trend data for the second half of 2009. Amongst consumers with a credit card, credit card debt increased 18% nationally from July. The Philadelphia Metropolitan Statistical Area (MSA) had the highest increase in credit card debt, with consumers racking up 40% more in credit card debt since July. In addition, consumers in five states increased their credit card balances by more than 30%. These states include:
- Indiana – credit card debt increased by 39%
- Michigan – credit card debt increased by 30%
- Oklahoma – credit card debt increased by 32%
- Pennsylvania – credit card debt increased by 30%
- Tennessee – credit card debt increased by 34%
“2009 was a rough year for many consumers, especially with unemployment topping 10-percent and the holidays,” says Ken Lin, CEO of Credit Karma. “After several months of paying down credit card balances, many consumers were forced to turn to credit cards towards the end of the year. Credit Karma anticipates consumers to return to frugality in early 2010 and that credit scores will continue to remain stable until the economy picks back up.”
At the end of 2009, the average consumer with an account has:
- $8,079 in credit card debt
- $184,940 in home mortgage loans
- $53,744 in home equity loans
- $14,899 in auto loans
- $26,692 in student loans
In addition, credit scores also decreased in most regions in the second half of 2009. Since July, credit scores have dropped two points; they are down six points since the beginning of 2009. The current average credit score is 671. Credit scores have remained stable since October.
Here are some other key findings:
- The Los Angeles MSA was the only MSA where consumers managed to increase their credit scores in 2009. Los Angeles consumers increased their credit score by one point to 693.
- Consumers in the Boston MSA saw the biggest decrease in credit scores in 2009. In Boston credit scores dropped 15 points to 692 which is still 21 points above the national average.
- Ohio consumers have seen the least amount of volatility in credit scores in 2009. In Ohio, credit scores dropped just one point since the beginning of the year and the current average is 661.
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 87,000 Credit Karma user scores.
About Credit Karma
Credit Karma, the consumer’s advocate for demystifying credit, is the only Web site that provides consumers free access to their credit score, plus a range of tools and information resources to help them monitor and manage the credit aspect of their financial health. Credit Karma’s goal is to help consumers easily digest the contents of their credit report and understand what makes up their credit score. Credit Karma works with a range of partners, including mortgage lenders, credit card providers, banks, and wireless providers. For more information, visit www.creditkarma.com.