While Americans improved late payments to lenders on a monthly basis in recent quarters, the overall U.S. consumer loan delinquency rate remained largely unchanged in the third quarter.
However, despite this, increases were shown in delinquency rates to lenders on credit cards, auto loan payments, mortgage loans and home-equity lines, indicating that many Americans may still be struggling with debt and unemployment and could even be facing foreclosure."Consumer-credit delinquencies are very much tied to what happens with jobs and what happens with income, and both of those stumbled in the third quarter," James Chessen, the American Bankers Association’s chief economist, told Bloomberg about his organization's findings.
The ABA's Consumer Credit Delinquency Bulletin found that home-equity loan delinquencies rose to 4.05 percent during the third quarter, which ended on September 30. This was an eight percentage point rise from the previous report's numbers.
In addition, many still struggled with credit card payments. Past-due delinquencies climbed from 3.62 to 3.64 percent during the three-month window.
In light of these troubles, consumers should note that late payments can severely harm a credit score. Since lenders use this data to set interest rates, many may now be paying more on their home loans and credit cards, for example.
