Credit Karma (www.creditkarma.com), a pro-consumer credit score tracking and management service, today released its U.S. Credit Score Climate Report with trend data for April 2009. During the January 2009 to April 2009 time period, Credit Karma saw an increase in credit scores across all geographies; however, the percent of credit scores rising has tapered off and the percentage of credit scores decreasing is rising. 41% of consumer credit scores have gone up, 29% have gone down, and 30% remained the same. The current average U.S. consumer credit score is 677.
“We’re just now starting to see the impacts of the layoffs in December and January on consumers’ credit scores,” said Ken Lin, CEO of Credit Karma. “Severance packages are beginning to dry up and many consumers are being forced to rely on their credit cards to get by. Credit card utilization is a key component of a credit score and as balances rise, credit scores tend to decrease.”
Here are some key findings:
- Compared with March, more consumers’ credit scores are decreasing. Nationally, 29% of consumers saw a decrease in their credit score in April. In March 2009, 27% of consumers saw a decrease in their credit score.
- Ohio, which over the past few months has been one of the states with the highest percentage of credit scores increasing, now has the highest percentage of credit scores decreasing. In April, 31% of consumers in Ohio saw a decrease in their credit score. In March 2009, that percentage was 29%. In Ohio, 40% of consumers still saw an increase in their credit score during April 2009, but that is down significantly from 44% increase in March and the 42% increase in February. The current average credit score in Ohio is 666, which is down a point from March.
- California also saw a large percentage of decreasing credit scores, particularly in the Bay Area. In the Bay Area, 36% of credit scores increased, 29% decreased, and 35% remained the same.
- For the third month in a row, the Midwest had the highest increase with 42% of consumers seeing their credit scores go up in April. The average up credit score in the Midwest is 675. In March 2009, 44% of Midwest consumers saw their credit scores rise and the average up score was 676. Amongst states, Virginia saw the most credit scores go up in April. 44% of Illinois consumers had their credit scores rise and the average up score is 677.
Methodology
Each month, the Credit Karma U.S. Consumer Credit Score Climate Report compares the current credit scores of its 250,000 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 20,000 Credit Karma user scores.
About Credit Karma
Credit Karma is a San Francisco-based, pro-consumer site that provides consumers free access to their credit scores plus a range of tools and information resources to help them monitor and manage the credit aspect of their financial health. The service has delivered more than 850,000 free credit scores and counts more than 250,000 registered members. 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.