Credit Card Debt, Credit Scores Down, Free Credit Analysis Site CreditKarma.com Says
Credit card debt is decreasing, but that doesn’t necessarily mean Americans are chipping away at bills, site CreditKarma.com explains.
Credit card debt has gone down on average among US borrowers, but so have credit scores. Truly free credit score provider CreditKarma.com — a site that offers what many fans affectionately refer to as “FAKO” scores, a play on the official FICO scores that define a borrowers credit profile — has released its June 2012 U.S. Credit Score Climate Report with trend data, and a few factors have influenced the use and availability of credit right now.
According to CreditKarma.com CEO Ken Lin, credit card debt decreases are often a sign of weak consumer confidence:
“The lackluster economy is partially to blame for the positive trend of decreasing credit card debt… Consumers tend to take on more credit card debt when they feel more confident about their jobs and the economy. Because of the lack of confidence, I think we’ll continue to see credit card debt decrease throughout the year.”
Credit card debt isn’t the only thing dropping in the more recent months, CreditKarma.com’s trends report.
Corresponding credit scores have also dipped lower, and average their lowest numbers since CreditKarma.com began tracking the figures in February 2009.
According to the report, credit scores now average 655, although they can range from in the 300s up to 800. The site also reports that home mortgage debt is down 1% to an average of to $166,325, home equity debt is down by.6% to $46,061, auto loan debt is down 5% to $15,818 and student loan debt is down 16% to $29,390.
