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Credit card debt increased and credit scores improved for many consumers last month, according to a report by Credit Karma Inc., a San Francisco-based company whose Web site tracks credit scores.
Although major card issuers reported significantly lower credit-spending volume for the third quarter, Credit Karma says the average consumer had $7,573 in credit card debt last month, up 14% from $6,641 in September.
"This month's data shows that consumers are feeling more confident about spending money again ahead of the holidays," Ken Lin, Credit Karma's CEO, says of the report's findings. "However, credit scores remain high in regions with lower increases in credit card spending, proving there's a direct correlation between debt and credit scores."
Nationally, 40% of consumer credit scores increased last month, compared with 39% that did in September, and 37% that did in August, according to data from approximately 79,000 Credit Karma user scores. Despite the high percentage of increasing credit scores, the average credit score of 671 is still down one point from September and down five points since the beginning of the year.
Consumers in North Carolina and Louisiana had the highest percentage of increasing credit scores. In both states, 44% of consumers were able to increase their credit scores in October; however both states have average credit scores below the national average. The average credit score in October was 663 for North Carolina and 646 for Louisiana.
The average home mortgage loan was $194,372 in October, a 2.2% increase from $190,096 in the previous month. Auto loans increased 2.3% to $14,729 from $14,402 a month earlier.
