Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Americans across the country are paying off debt and remaining cautious about taking on new debt. Is this due to a greater economic recovery, or are consumers playing a larger part in debt levels? And how might this affect credit scores?
Overall consumer debt fell by 2.28 percent in the third quarter of the year versus the same period a year ago, marking a $256 billion drop over the last year. U.S. consumers owe a little less than $11 trillion in total debt, with mortgage debt accounting for slightly more than three-quarters of that amount.
The drop in debt reflects a rise in what Trey Loughran, president of the Personal Solutions unit at Equifax, calls the “disciplined consumer”—a borrower who is more disciplined in taking on new debt and is careful about how he or she manages pre-existing credit.
“Generally speaking, consumers are showing discipline and caution about debt coming out of the recession,” Loughran said. “Even though people are taking on debt to get new automobiles, we also know they are driving their cars longer. We expect the trend of the ‘disciplined consumer’ to continue for some time.”
Of the overall debt, non-mortgage consumer debt increased 0.7 percent, due largely to continual increases in auto financing. Auto debt rose 7.1 percent nationally over last year and is one of the few areas where spending has recently increased.
On the other hand, mortgage debt dropped 3.4 percent. While the decrease in mortgage debt may be due to Americans consistently paying off their mortgages, mortgage debt also gets written off after foreclosures, dropping total consumer debt.
Differences in consumer debt seen across the United States
While debt decreased overall nationwide, consumer debt increased in three cities over last year. In the Houston area, debt climbed 1.37 percent; in Pittsburgh, it increased 1.05 percent; and in the Dallas-Fort Worth area, debt grew 0.08 percent.
The recession has affected portions of the country differently, with unemployment figures varying city by city and foreclosure rates changing dramatically state to state. Residents of states hit particularly hard by the recession—California, Florida, Nevada, and Arizona—have been more cautious about taking on new debt and have been more regularly paying off their debt.
The largest declines in consumer debt were in the Las Vegas, Miami-Fort Lauderdale, Sacramento-Yolo, and Phoenix-Mesa markets—all areas that had some of the highest foreclosure rates amid the recession.
After the holidays, it’s possible that the last quarter of the year will see higher consumer debt than previous quarters—typically consumers rack up some temporary debt during the last part of the year. Whether the overall trend will continue to decrease year over year remains to be seen.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.