New Mortgages Sank This Year

Mortgage originations are down by 39 percent so far in 2014, with one in 79 households securing a new mortgage (compared with one in 48 in 2013), according to the Experian credit reporting service.

However, credit scores and card lending both experienced more positive signs of growth since 2013. While these categories are showing upward growth, fewer people have opened a new mortgage in the past year.

Other findings from Experian’s Fifth Annual State of Credit Study:

•The national VantageScore^® credit score¹ is up by two points, from 664 to 666
•Bankcard lending is on the rise, with new bankcards up 21.1 percent, with one in 17 consumers opening at least one bankcard (compared with one in 21 consumers in 2013)
•The average number of bankcards per person is up 4.2 percent to 2.18 cards
•Retail card lending also is on the upswing with a 3.5 percent increase
•The average number of retail cards is up 6.7 percent to 1.54 cards per consumer
•Average debt² is up 2.3 percent to $28,496 per person

“This has been a notable year for borrowing, with more new credit being extended and consumers feeling more comfortable and confident about accepting those credit offers,” said Michele Raneri, vice president of analytics, Experian. “Even with some categories like mortgage taking longer to bounce back, an early glimpse at our third-quarter data indicates that an upward trend may be on the horizon.”

The study not only examined the national credit picture, but also looked at more than 100 Metropolitan Statistical Areas (MSAs) across the country and compared their credit scores with one another to see how they are faring. Topping the list with an average credit score of 706 are the residents of Mankato, Minn., followed by three other Minneapolis cities securing top spots. The city in need of the most improvement is Greenwood, Miss., with the lowest credit score of 609. The full list of the top 10 and bottom 10 cities are featured below. Scores are rounded to the nearest whole number.

Other key highlights of the top and bottom cities:

•Forty percent of the top 10 cities are in Minnesota.
•Mankato, with its credit score of 706, is the highest in the country and is 40 points higher than the U.S. average of 666. Mankato residents increased their score by 3 points compared with 2013.
•Sioux Falls went down one point, which makes it the only city in the top 10 to decrease its score from last year.
•Of the bottom 10 cities, Albany had the largest score increase over the last year. Its residents increased their score by five points, from 616 to the current 621.

¹ VantageScore range is 300-850

² Average debt for this study includes all credit cards, auto loans and personal loans/student loans.