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For months now, Americans have been making more concerted efforts to get their finances in order by keeping up with their monthly bills, and those efforts have continually paid off in the form of lower default rates across nearly all kinds of credit.

All but one of the 10 major types of consumer credit saw default rates decline in June, and many did so for the sixth consecutive month, according to the latest Consumer Credit Default Indices issued by S&P Dow Jones Indices and the credit rating bureau Experian. In all, default rates for four loan types declined to the lowest point seen since the end of the recent recession, and the composite of all write-offs for consumer credit made up just 1.52 percent of all balances. That’s down from both May’s 1.62 percent and June 2011’s 2.14 percent.

David Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices, noted that default rates for nearly all loan types are now closing in on all-time lows, the report said. For instance, the percentage of write offs for second mortgages was the lowest observed in about aeight years at just 0.73 percent of all balances, down by nearly half from the 1.4 percent observed in the same month last year, and 0.88 percent from May. Similarly, first mortgages saw default rates fall to 1.41 percent in June, the lowest observed since May 2007. The latest rate was down from the previous month’s 1.5, and a year-over-year decline from 2.02 percent.

Of the four major loan types tracked, those for credit cards remained the highest by far, coming in at 3.97 percent of balances, the report said. However, that was down from 4.35 percent in May and 5.69 percent in June 2011. Blitzer noted that this, too, was close to lows not seen in nearly eight years.

Meanwhile, the only loan type that actually saw an increase in defaults was auto financing, the report said. But the monthly increase there – to 1.04 percent from 1.03 percent – was very minor, and was still down considerably from the 1.29 percent in June 2011.

Consumers have been drastically reducing instances of delinquency and default since the end of the recession by getting a better handle on their credit and making more on-time payments as they gain financial stability.

Image: seishin17, via Flickr

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