Experian, a global information solutions company, announced that it has recently completed an analysis of consumer payment behavior in the subprime lending market. In a challenge to conventional wisdom, Experian found that subprime consumers are 30 days or more delinquent on mortgage debt more often than they are delinquent on unsecured, bankcard obligations. Historically, consumers have paid mortgage debt over bankcard debt as people traditionally view their home as their most valuable asset which should be protected at all costs.
The new findings held true only for those consumers who are in the subprime segment, defined by Experian’s credit score of 620 or lower. Consumers with credit scores considered to be “prime”-above 680-continued to follow traditional historical patterns of paying mortgage debt before bankcard debt. Other findings of Experian’s analysis:
– Subprime consumers are now delinquent on mortgage debt more often than unsecured bankcard debt.
– For subprime consumers, the mortgage delinquency rate has grown at 13.2 percent over the past four years.
– The same delinquency trends are present across each geographic region in the US.
– The western region experienced the sharpest growth in delinquencies-15.3 percent for mortgage and 6.4 percent for bankcard.
– Between 2005 and 2006, outstanding mortgage balances for subprime consumers increased 8.8 percent while total mortgage outstanding balances only grew by 3.3 percent.
The data analysis was conducted using Experian’s Portfolio Benchmarking and Trend AnalysisSM, a sophisticated portfolio management tool that tracks and analyzes changes in consumer credit activity and other marketplace metrics. Companies can utilize this intelligence to assess current conditions, analyze trends and benchmark against competitors for strategic portfolio management decisions.
For more information about the Experian study, including a graphical representation of the data, please call Susan Henson at 714 830 5129 or at [email protected]
Experian is a global leader in providing analytical and information services to organizations and consumers to help manage the risk and reward of commercial and financial decisions. Combining its unique information tools and deep understanding of individuals, markets and economies, Experian partners with organizations around the world to establish and strengthen customer relationships and provide their businesses with competitive advantage. For consumers, Experian delivers critical information that enables them to make financial and purchasing decisions with greater control and confidence. Clients include organizations from financial services, retail and catalog, telecommunications, utilities, media, insurance, automotive, leisure, e-commerce, manufacturing, property and government sectors.
Experian Group Limited is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. It has corporate headquarters in Dublin, Ireland, and operational headquarters in Costa Mesa, Calif., and Nottingham, UK. Experian employs more than 12,500 people in 34 countries worldwide, supporting clients in more than 60 countries. Annual sales are in excess of $3.1 billion.