America’s Shifting Debt Dilemma - U.S. News & World Report

The average American's credit score has never been higher, but rising levels of consumer debt have some analysts worried a bubble is forming.  The Wall Street Journal reported Monday that the average credit score hit 700 in April to reach its highest level since such information was first tracked by Fair Isaac Corp. [-] back in 2005.  On top of that, the share of consumers with scores below 600 dropped to about 40 million, representing 20 percent of U.S. adults with FICO scores. That percentage peaked at 25.5 percent in 2010.  Americans' personal savings rate – which tracks the percentage of disposable income a consumer stashes away in a given month – soared during and after the crisis. And at 5.3 percent in April, it still sits above any level reached in 2005, 2006 or 2007.  Now, consumer default rates are significantly lower than they were even just a few years ago. A composite S&P/Experian consumer credit default index in April was slightly elevated from where it sat through much of 2016.  Consumers' debt portfolios simply look different than they did 10 years ago, as mortgage obligations have taken a backseat for many while student, auto and credit card loans have soared. A household debt tracker published earlier this year by the Fed's New York regional bank estimated total household indebtedness sat at $12.7 trillion at the end of the first quarter. That's up $50 billion from the previous peak reached in the third quarter of 2008.

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