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June 09, 2011

  • News:  U.S. Struggles To Maintain Credit Scores 

    The most recent U.S. Credit Score Climate Report by CreditKarma.com shows the average U.S. consumer's credit score has dropped three points to 667 since last year. The results show credit card debt dropped by 15% to $6,740 in the same time period. Wisconsin leads the pack with the lowest credit card debt in the nation at $4,637 per person in May 2011 and New Jersey has the highest with $7,545. The report shows consumers in the metropolitan areas of Colorado Springs, Colorado, Des Moines-West Des Moines, Iowa, Harrisburg-Carlisle, Pennsylvania, Palm Bay-Melbourne-Titusville, Florida and North Port-Bradenton-Sarasota, Florida have the highest amount of credit card debt in the country at $7,000 or more.

    Even as consumers are chipping away at their credit card debt they continue to pay down their mortgage and pay off home equity loans. The average mortgage debt fell 2% to $172,957 and consumers in 13 states paid down their mortgage by more than the national average. Nevada and North Carolina were the leaders in this category, paying down mortgage debt by 7%. The average home equity debt fell 5 percent to $48,310. Auto loan debt increased 2% to $15,217 and student loans debt increased 5% to $29,680. As credit card debt goes down and personal loan debt balances increase, credit scores adjust.

    Consumers in California had the highest average credit scores at 685. While 7 states fall into to the below-average category, with scores below 650. They include: Alabama, Arizona, Kentucky, Louisiana, Mississippi, South Carolina and West Virginia. Mississippi has the lowest at 634. In spite of credit card debt going down, experts see scores dropping because of prolonged unemployment. Ken Lin, CEO of CreditKarma.com explains that Americans continue to face the added burden of the declining real estate market. As they watch their property's value continue to decline, they grapple with the decision of whether or not they should hold on to it.

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