Market Trends

Following a full year of steady improvement, small-business credit conditions stumbled during the first quarter of 2014.

Bankcard originations had a 32 percent year-over-year increase in Q4 2013 ($61 billion to $81 billion).

While access to small-business credit is improving and credit balances are increasing, key differences still remain across the United States.

Using a risk model based on older data can result in reduced predictive power.

The housing market continues to recover, with mortgage originations increasing 12 percent year over year, moving from $508 billion to $570 billion.

Small-business credit conditions wrapped up the year by showing continued improvement for the fourth consecutive quarter.

Delinquency rates for auto loans moved up slightly in the last quarter of 2013, with the 30 to 59 days past due (DPD), 60 to 89 DPD and 90 to 180 DPD delinquency rates at 2.18 percent, 0.56 percent and 0.24 percent, respectively.

The volume of emails sent by marketers rose nearly 13 percent during the 2013 holiday season compared to 2012.

According to Experian Marketing Services’ holiday peak week analysis, social media proved to be a key research tool for holiday shoppers and a crucial driver of traffic to retail Websites.

With most lenders focused on growth as the top priority for the new year, having the ability to score more consumers is key.

According to the National Christmas Tree Association, approximately 25 to 30 million real Christmas trees are sold annually in the United States versus 8 to 11 million artificial trees.

Experian’s latest annual State of Credit analysis provides insight into the differences in credit habits by generation. While the youngest group, Millennials, appear to be novice credit managers, Generation Xers have the highest amount of average debt, are slowest to make payments on time and tied with Millennials for highest percentage of credit utilized. The results of the study reinforce the importance of lenders providing transparent consumer education on credit scores and responsible credit behavior. Snapshot of generational debt differences Baby Boomers (47 to 65) Generation X (30 to 46) Millennials (19 to 29) VantageScore® credit score 700 653 628 Average debt $29,317 $30,039 $23,332 Average balance of bankcards $5,347 $5,343 $2,682 Average revolving utilization 30% 37% 37% Late payments 0.33 0.61 0.58 Download our recent Webinar: It’s a new reality ... and time for a new risk score Source: Experian’s State of Credit infographic

Data quality should be a priority for retailers at any time of the year, but even more so as the holiday season approaches. According to recent research from Experian, organizations feel that, on average, 25 percent of their data is inaccurate and 12 percent of departmental budgets are wasted due to inaccuracies in contact data. During the 2013 holiday season, consumer spending is expected to increase by at least 11 percent. Retailers need to improve data quality early on in order to ensure that relevant holiday offers reach consumers and to take advantage of the expected increase in consumer spending. View our recent Webinar: Unique insights on consumer credit trends and the impact of consumer behavior on the economic recovery Source: View our data quality infographic: ’Twas the month before the holidays

The credit appetite for small businesses is strong and growing. Total outstanding balances have risen at their fastest rate in two years, and delinquency rates have fallen at a consistent pace. Only 10 percent of outstanding small-business credit balances were past-due in Q3 — the lowest level of delinquency seen since the recovery began. While this is an encouraging sign, it is important to note that these improvements have come at the cost of hiring new employees and investments. Sign up for the Quarterly Business Credit Review Webinar on Dec. 10 Source: Download the full Experian/Moody’s Analytics Small Business Credit Index report.

Credit trends from the most recent Experian–Oliver Wyman Market Intelligence Report point to a steady economic recovery. Bankcard charge-offs decreased 13 percent year over year (4.5 percent versus 3.9 percent) and delinquent dollars for the 90–180 day past due delinquencies decreased 17.5 percent for the same timeframe (1.6 percent to 1.3 percent). These trends are a positive sign for overall economic recovery and evidence that the current growth in bankcard originations is not coming at the expense of increased delinquencies. Sign up to attend our upcoming Webinar on Q3 credit trends and take a closer look at the impact of consumer behavior on the economic recovery. Source: Data for this article was sourced from Experian’s IntelliViewSM, a Web-based data query, analysis and reporting tool.