Market Trends

Using data from IntelliViewSM, Credit.com recently compiled a list of states with the highest average bankcard utilization rates. Alaska took first place, with an average utilization ratio of 27.73 percent. This should come as no surprise since Alaska has recently topped lists for highest credit card balances and highest revolving debt.

Small-business credit conditions improved in Q1 2013, reversing much of the deterioration seen during Q4 2012. The Q1 rise was fueled primarily by falling delinquency rates in every segment compared with a year earlier. The total share of delinquent dollars was 11.2 percent for Q1 2013 - 1.4 percentage points lower than a year ago.

A recent Experian credit trends analysis of new mortgages and bankcards from Q1 2013 shows a 16 percent year-over-year increase in mortgage origination volume and a 20 percent increase in bankcard limits. Providing further evidence of continued economic recovery throughout the nation, mortgage delinquency rates reached multi-year lows and bankcard delinquency rates reached near-record lows.

A recent study comparing financial differences between men and women found that, overall, women are better at managing money and debt. Differences between the two populations include:

Financial institutions are revisiting their policies and thresholds for lending to small businesses and are slowly loosening restrictions. In a recent survey by the Federal Reserve Board, 9.2 percent of senior loan officers said they have "somewhat" eased their standards for lending to small firms and provided commercial borrowers more leeway, in the form of slightly bigger credit lines and longer maturity terms.

A recent survey that polled Americans on credit scores found that while nearly half of respondents (49 percent) check their credit scores at least once per year, the rest check once every two years or less, including a worrisome 22 percent who never check. The most common reasons for checking a credit score include purchasing a home (31 percent) or an automobile (32 percent).

VantageScore Solutions’ analysts recently examined how many accounts consumers with prime credit scores typically have in their credit file. Consumers who generally qualify for loans have an average of 13 loans in their credit files, and typically the oldest loan is more than 15 years old.

While VantageScore® credit score super-prime consumers carried the lowest average credit card balance of all credit tiers in Q4 2012 ($2,581), this group experienced the greatest average balance increase (6 percent) when compared with the previous quarter. All other credit tiers had little or no change to their average credit card balance.

Using a more inclusive scoring model such as the new VantageScore® 3.0, lenders can score up to 30 million consumers who are labeled "unscoreable" by traditional models. Nearly 25 percent of these consumers are prime or near-prime credit quality.

While the overall average VantageScore® for consumers in Q4 2012 was 748, the average score can vary greatly by specific loan product. For example, the average VantageScore for consumers with a home equity line of credit is 864, which is the highest average score for all products, reflecting tighter lending requirements. Student loans have the lowest average VantageScore of 695.

Spending on debit and prepaid cards in the United States topped $2 trillion in 2011, with 75 percent of this purchase volume being non-ATM transactions. The evolution of marketing knowledge and tactics for the U.S. debit card market can be applied to other countries migrating payment from cash to noncash transactions.

The Experian/Moody's Analytics Small Business Credit Index tumbled in Q4 2012, falling 6.8 points to 97.3 from 104.1 in the previous quarter. This is the second consecutive quarterly decline and is the index's lowest reading since Q3 2011. The drop in the index was driven primarily by a rise in delinquent balances as a slowdown in personal income growth pulled retail sales lower.

The average unscoreable consumer has a good job and a better-than-adequate credit profile. Sixty-one percent of unscoreable consumers hold professional level or skilled labor jobs, 30 percent have credit profiles that fall into the super prime/prime category and 20 percent are considered near-prime.

According to a recent survey that asked Americans about their understanding of credit scores 83 percent have checked their credit scores and nearly half (42 percent) want to improve credit scores, but don’t know how. Sixty-five percent of respondents indicated they consider their credit score when engaging in credit-related activities such as applying for a new card or skipping a payment. When it comes to gender and credit, women (68 percent) are more likely than men (61 percent) to consider their credit score before making credit usage decisions.

Roughly 70 percent of credit scores change by up to 20 points in any given 90-day window. Most consumers experience a score improvement rather than a score drop, with 56 percent of consumers shifting higher, 34 percent shifting lower and 10 percent staying the same.