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.
The average U.S. household stayed out of financial distress in the year’s first quarter, but only barely. Consumers’ strained household budgets curbed financial progress, according to the most recent findings from the CredAbility Consumer Distress Index. The Index monitors the financial condition of the average…
The average U.S. household stayed out of financial distress in the year’s first quarter, but only barely. Consumers’ strained household budgets curbed financial progress, according to the most recent findings from the CredAbility Consumer Distress Index.
The Index monitors the financial condition of the average U.S. household by measuring employment, housing, credit, how families manage household budgets, and net worth. In the first quarter, U.S. households scored 70.7 on the Index’s 100-point scale, where a score below 70 marks a state of financial distress.
Gains in employment, housing, credit, and net worth were enough to keep the average household afloat, but plummeting household savings and a sinking consumer sentiment index restrained budgets more than three years into the economic recovery.
While the most recent score was down 1.1 point from the last quarter of 2012, the index has moved up and down the past four quarters, resulting in a net gain of less than one point.
Credit is under control
“The average household is positioned to improve financially,” says Scott Scredon, director of public relations at CredAbility, “and that’s because employment is rising, housing values are rising, and mortgage delinquency rates are falling—and at the same time, people have their credit under control.”
The Index’s credit category, which Scredon calls the “shining star” in terms of consumer behavior over the last few years, topped 90 for the first time in 24 years.
“Credit card delinquencies are very low compared to historic levels, and bankruptcies are falling,” Scredon says. “People have done a good job of keeping their spending under control and paying back any credit they borrow.”
Saving money is a challenge
Despite keeping their spending under control, consumers seem to be having trouble saving money. The net worth category, measured by home value, stock market holdings, and personal savings, is well below 70, but it has reached its highest point since the financial crisis hit, with a five-point gain in more than four years.
However, the three indicators that make up the household budget category—the amount of money consumers save after they pay their bills, the amount of money consumers have available for emergency savings, and the consumer sentiment index—dropped rather significantly from the fourth quarter of 2012 to the first quarter of 2013.
The Social Security tax hike in January could have impacted household savings by reducing disposable income and the amount of money available to save, says Scredon.
He adds, “We are hoping that after the end of each month, people will save about 7 percent of their household income after they have paid all of their bills. Unfortunately, the savings after the end of the first quarter were close to 2 percent.”
Budgets are unstable
Of the five categories that make up the Index, the household budget category is the most volatile, according to Scredon, as it is affected by factors like gas and food prices.
The household budget category is also counter-cyclical. When times are tough, consumers tend to tighten their purse strings, and when the economy improves, consumers tend to get looser with their spending.
As consumers gear up for the summer, Scredon recommends carefully managing travel plans, particularly while gas prices are expected to rise, and being mindful of discretionary spending.
Joslin Woods is a researcher, writer, and Web producer at Think Glink Publishing, with a background in print and digital media. Previously, Joslin worked as a news reporter for the international news agency Agence France-Presse and as a freelance reporter for the Sun-Times News Group. She is a graduate of Vanderbilt University and Northwestern University, where she received a master’s degree in journalism.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.
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.