SOURCE: CreditKarma.com

January 12, 2011 08:00 ET

Consumers Lower Credit Card Debt Eight Percent in 2010

Credit Scores Down One Point Nationally Since January 2010, According to CreditKarma.com

SAN FRANCISCO, CA--(Marketwire - January 12, 2011) - CreditKarma.com, the consumer's credit advocate, today released its U.S. Credit Score Climate Report with trend data for December 2010. Since January 2010, credit card debt amongst consumers decreased eight percent nationally to $7,404. Additionally, consumers in eight states paid down their credit card balances by more than the national average of eight percent since January 2010. These include:

  • California, Colorado, Connecticut, Indiana, Oklahoma and Tennessee -- decreased credit card debt nine percent
  • Nevada -- decreased credit card debt 11 percent
  • Wisconsin -- decreased credit card debt 31 percent

In 2010, the average consumer with an account:

  • Decreased home mortgage loans four percent to $173,340
  • Decreased home equity four percent to $49,803
  • Increased auto loans four percent to $15,274
  • Increased student loans 10 percent to $29,016

Nationally, credit scores are 668, down one point since the beginning of the year. Consumers in six metropolitan statistical areas (MSAs) have seen a credit score decline greater than the national average since January 2010. Chicago, Houston and New York City saw a two point decrease, credit scores in Los Angeles and San Francisco lowered three points and Philadelphia had a four point decrease.

"As 2010 drew to a close, we saw credit scores stabilize and consumers make great efforts to pay down their debt," said Ken Lin, CEO of CreditKarma.com. "If consumers continue their focus on financial responsibility, we suspect credit scores nationally will eventually increase in the new year."

Other key findings include:

  • Massachusetts and New Jersey have the highest credit scores nationally. The average credit score in both states is 686.

  • With an average credit score of 641, Arkansas has the lowest credit scores nationally.

  • Six states currently have fair to poor credit scores of 650 or lower, including Alabama, Arkansas, Kentucky, Louisiana, Oklahoma and South Carolina.

  • Louisiana saw the largest credit score change since January 2010. The average credit score in Louisiana rose eight points from 639 to 647 in December 2010.

Methodology
Each month, the CreditKarma.com U.S. Consumer Credit Score Climate Report compares the current credit scores of its user base with previous scores pulled at least 30 days prior and no more than 90 days prior to the stated month. This month's report includes a comparison of more than 157,588 CreditKarma.com user scores.

About CreditKarma.com
CreditKarma.com is a completely free credit management service that enables consumers to put their credit to work for their overall financial health by providing them with customized savings recommendations. CreditKarma.com's goal is to help its more than 2 million users realize the everyday cost savings of having a good credit score by providing free credit scores, as well as a range of tools to help consumers improve their financial situation. For more information, visit www.creditkarma.com.

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