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Americans Are Defaulting Slightly More Often

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National credit default rates increased slightly in July, according to the S&P/Experian Consumer Credit Default Indices.

Though default rates increased from June, they are still down year-over-year and are at or near historic lows.

Counting all credit products, 1.35% ended in default in July. That’s up from a national composite default rate of 1.34% in June, down from 1.51% in July 2012.

Bank cards had the highest default rate, but hit a historic low in July at 3.22%, down from 3.41% in June and down from 3.83% last year.

Other products didn’t see as much change.

Auto loan defaults hit 1.03% in July, up from 1% in June and 1.01% last year. First mortgages increased to 1.25%  from 1.23% in June, which is down from 1.41% 2012. Second mortgages were consistent month-to-month at 0.54%, down from 0.75% in July 2012.

With all loan types below their July 2012 levels, consumer credit is healthy, said David M. Blitzer, the managing director and chairman of the Index Committee for S&P Dow Jones Indices, in a news release.

The year-over-year decline in the default rate shows a positive change in consumer responsibility. Late payments can put a dent in a consumer’s credit score, which in turn impacts that consumer’s ability to get other forms of credit or decent interest rates.

In addition to staying on top of bills, consumers should keep an eye on their credit scores and work to raise them. A tool that can help is Credit.com’s free Credit Report Card, from which a consumer receives monthly insights into his or her credit behavior.

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