ATLANTA (11/7/11)--Total consumer debt is down slightly and almost to pre-recession levels, according to the latest monthly Equifax National Credit Trends Report
The debt totals $11.2 trillion, just above the $11.1 trillion posted before the recession in 2006. That compares with the peak debt of $12.4 trillion in October 2008.
The report looks at new credit, which includes auto loans, bank credit cards, consumer finance loans, home equity lines of credit, retail credit cards and student loans. It does not include first mortgage originations.
- Roughly $436 billion of total new credit was originated between January and July 2011--the highest amount for the same period in three years. Still, it is well below the $805 billion in new credit originated from January to July 2006.
- Although outstanding debit is on a downward trend, consumers are beginning to use bank credit cards and retail credit cards more. Both sectors saw balances rises from June to September, after a four month decline from February to May.
- Loans originated between 2005 and 2007 posed the biggest challenge in ongoing delinquencies for all sectors tracked. Delinquencies represent 31% of total balances; however, they also represent 65% of past due balances (at least 30 days overdue). This was particularly true for first mortgage and home equity loans originated during the period. About 74% of first mortgage loan delinquencies and 80% of home equity revolving loan delinquencies were originated then.
Michael Koukounas, Equifax senior vice president of special client services, noted that the impact of the 2005-2007 loans "continues to be felt across multiple lending sectors. More than two-thirds of delinquent loans can be sourced to those originated during that time. In contrast, loans originated after 2008 are performing substantially better due to the tighter underwriting guidelines in place since then."
- Auto lending performance was consistent, with 11.3 million new loans originated between January and July. That is 13% more than in that period for 2010.
- Lending volumes held steady with loan amounts higher overall than in 2010.
- Bank card credit grew by $41 billion from February through September, with September bank card delinquencies 35% lower than in September 2010.
- Home equity balances continued their 12-montyh decline. September home equity installment loan balances were 13% less than in September 2010, while revolving loan balances were 6.l6% lower than in September 2010.
- For the past three years, new consumer finance loan amounts have remained steady, with $5.2 million originated in July, compared with $5.1 million in July of 2010 and $5.2 million in July 2009.
Equifax' analysis is from data on more than 585 million consumers and 81 million businesses worldwide.