Credit Karma (www.creditkarma.com), the consumer’s credit advocate, today released its U.S. Credit Score Climate Report with trend data for May 2010. Credit card debt amongst consumers with a credit card decreased 1% in May to its lowest level in 2010; however, credit card debt is still 8% higher than it was in May 2009. Consumers in the Philadelphia Metropolitan Statistical Area (MSA) showed the biggest increase in credit card debt since May 2009 with debt increasing 18%. In addition, consumers in nine states increased credit card debt by more than 10% since May 2009. These include:
- Pennsylvania – up 25% to $7,362
- Michigan – up 20% to $7,468
- Arizona – up 18% to 7,925
- Colorado – up 18% to $8,842
- Indiana – up 17% to $7,654
- Ohio – up 17% to $7,541
- Illinois – up 14% to $8,186
- New Jersey – up 14% to $8,612
- Virginia – up 11% to $8,127
In May, the average consumer with an open account had:
- $7,652 in credit card debt
- $176,346 in home mortgage loans
- $51,093 in home equity
- $14,977 in auto loans
- $28,198 in student loans
Nationally, credit scores continue to remain stable in 2010 as consumers begin to pay down the increased debt and the economy begins its recovery. In May, the average consumer had a credit score of 669, which is down five points since May 2009, but flat for 2010.
In addition, this month, Credit Karma looked at charge-off data for 2009 and 2010. The data shows the number of charge-offs to the number of accounts in good standing. In May 2009, there were four charged off accounts for every 1000 accounts in good standing.
“From the data, it appears that the rate of charge-offs seems to have peaked in December 2009 and January 2010,” said Ken Lin, CEO of Credit Karma. “This is consistent with the conventional wisdom that credit card charge-offs are highly correlated with the unemployment rate which also peaked in Q4 2009.”
Here are some other key findings:
- Consumers in the San Francisco and New York City MSAs were the only consumers to pay down credit card debt since May 2009. Credit card debt decreased 14% and 8% respectively.
- Consumers in the San Diego MSA saw the biggest decrease to their credit score in May with credit scores down five points since April. The current average credit score in San Diego is 689.
- Consumers in Louisiana saw the biggest increase to their credit score with credit scores increasing three points to 647 in May 2010.
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 115,800 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.