Get Out of Debt Guy - Steve Rhode

New York Fed Data Projects More of Same for Debt Relief Companies

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New data out of the New York Federal Reserve shows debt relief companies, like credit counseling, debt settlement, and bankruptcy providers should expect to see demand remain at current levels based on historical data.

The Fed found:

Financial Inclusion Indicators

Inclusion (percent of a community that has a credit file and a credit score – known as “the credit economy”): 89.2% in 2015, up from 89.0% in 2014

Revolving Credit (percent of the credit economy that has access to credit lines, up to a limit– such as credit cards and home equity lines of credit): 69.7% in 2015, up from 68.3% in 2014

Utilization or Capacity (percent of the credit economy with 70% or more credit line capacity): 37.9% in 2015, up from 37.1% in 2014

On-time Payers (percent of credit economy who were never more than 30 days past due each quarter): 77.7% in 2015, up from 77.3% in 2014

Credit Score:

Financial Stress Indicators

Good Payment History (percent of the credit economy who were never more than 60 days past due each quarter): 81% in 2015, similar to 2014

Consistently Delinquent Payments (percent of the credit economy who were more than 60 days past due each quarter): 8% in 2015, similar to 2014

Regional Variation in Community Outcomes

Across all indicators, states in the northern region of the United States displayed greater credit well-being than states across the southern region of the country. For example, North Dakota, Wisconsin and South Dakota had good payment histories of 89%, 87% and 87%, respectively, and consistent delinquency rates of 4%, 5% and 5%, respectively. By contrast, Mississippi, South Carolina, and Louisiana had good payment histories of 73%, 73% and 75%, respectively, and consistent delinquency rates of 11%, 13% and 11%, respectively

Minnesota ranked among the top three states in credit health, having the highest: inclusion rate (94.2%), revolving credit rate (77.2%), capacity (47.0%), prime credit score (60.6%) and good payment history (87%)

Arizona, Alaska and New York have the highest percentages of adults who are not in the credit mainstream with inclusion rates of 15.3%, 15.2% and 15.2% respectively

New Mexico tied with several other states for having the lowest good payment history (75%). At the county level, McKinley County, New Mexico has among the lowest share of revolving credit users (35.2%), the lowest share with capacity (13.7%), and the lowest share of on-time payers (44.3%)

The Washington, DC suburbs, by contrast, fared very well, with Arlington, VA consistently ranking among the top three counties for having the highest share of revolving credit users (87.5%) and highest share with capacity (58.2%), while Falls Church, VA had the highest good payment history nationwide (95%)

If you would like to read the full report, click here.


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