Weighty Decisions

New research shows that consumers with credit scores of 620 or lower are more likely to pay credit card debt before mortgage debt. This represents a significant departure from conventional behavior. Consumers with higher scores still tend to follow the historical payment pattern. The latest Experian study found that the mortgage delinquency rate for sub-prime consumers has grown at 13.2% over the past four years. Also, between 2005 and 2006, outstanding mortgage balances for sub-prime consumers increased 8.8%, while total outstanding mortgage balances grew only by 3.3%. Over the past four years, bankcard lending to sub-prime consumers has risen by 137%, and mortgage lending to sub-prime consumers grew by 58% during the same time period.