Experian: Subprime Consumers Pay Card Debt Before Mortgage

It’s no secret subprime consumers have proven a horrendous market for home lenders in the last year. It now appears many of these consumers pay their monthly credit card bills before they pay their mortgage.

Subprime consumers, defined as those with credit scores of 620 or lower, are more likely to be late 30 days or more on their mortgage payment than on their credit card debt, according to a study released today by Experian Information Solutions group, a division of the consumer information house Experian.

This is contrary to historic patterns and to the payment behavior of consumers considered prime, those with credit scores of 680 or higher, Experian reports.

No surprise then that mortgage delinquency rate for subprime consumers has grown more than 13 percent in the last four years, Experian found.

But lenders continued to entice subprime consumers with access to funds. During the last four years bankcard lending to the subprime set rose 137 percent while mortgage lending grew 58 percent.

Consumers in the Western region of the country are having the most problems paying their bills, Experian found. Delinquent payments on mortgages rose more than 15 percent and nearly 6.5 percent on credit cards for consumers in the west.

Experian used its Portfolio Benchmarking and Trend analysis portfolio management system to create the study.