Study: Default rates dropping for most consumer financial instruments

The rate at which U.S. consumers are defaulting on auto loans, mortgages and other financial obligations is generally trending lower, according to the S&P/Experian Consumer Credit Default Index released on Tuesday. However, credit management still seems to be an issue, as that index actually rose.

While auto loan defaults reached 2.4 percent in March of 2010, the S&P/Experian index showed that they fell to 1.9 percent in April, and both first and second mortgages showed noticeable declines from their levels of the previous month.

According to S&P Indices index committee chairman David Blitzer, “consumer defaults continue to moderate in the key big ticket items of first and second mortgages and auto loans. In these areas, defaults bottomed out around the same time as the stock market in the first half of 2009. Bank cards on the other hand continue to worsen and are at levels not seen in the history of these indices.”

Consumers who find themselves sinking deeper into credit card debt could benefit from enrolling in credit counseling programs, as a way of avoiding possible black marks on their credit rating or even bankruptcy.