U.S. consumers average credit scores dropped three points to 667 since May 2010, while credit card debt plunged by 15% to $6,740 in the same period, according to data Credit Karma released Thursday.
Even though card debt is down, "prolonged unemployment can drag scores down. The poor real estate situation puts additional pressure on credit scores as more consumers evaluate their undervalued property and the decision to keep it," says Ken Lin, CEO at Credit Karma, the San Francisco-based company that tracks both scores and household debt through its Web site, CreditKarma.com.
Consumers in Colorado Springs, Col., Des Moines-West Des Moines, Iowa, Harrisburg-Carlisle, Pa., Palm Bay-Melbourne-Titusville, Fla. and North Port-Bradenton-Sarasota, Fla. have the highest amount of credit card debt in the country at $7,000 or more.
The average mortgage debt fell 2% to $172,957. Consumers in 13 states decreased their mortgage by more than the national average, including: Nevada and North Carolina, down 7%; Alabama, down 6%; Florida and Michigan, down 5%; and California, Georgia, Illinois, Indiana, Maine, Montana, Ohio and Utah - all down 3%.
"As the housing market begins to double-dip and home prices plummet, it’s not surprising that homeowner debt and equity fell," says Lin. "Banks aren’t going to enter into new housing loans or provide equity loans when home values continue to decrease."
Consumers in California had the highest credit score amongst states at 685, while San Jose-San Francisco-Oakland residents topped the metropolitan statistical area (MSA) list at 702. Consumers in Alabama, Arizona, Kentucky Louisiana, Mississippi, South Carolina and West Virginia have a credit score below 650, which is considered poor.
CreditKarma.com's U.S. Consumer Credit Score Climate Report compares the 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. The May 2011 report includes a comparison of more than 195,300 CreditKarma.com user scores.
Other key findings from the May report include: consumers increased auto loan debt 2% to $15,217; decreased home equity debt by 5% to $48,310; and increased student loan debt 5% to $29,680.