For the first time since the 2008 financial crisis, household debt reached new heights in 2017. Household debt in 2017’s second quarter rose $164 billion above the previous high in 2008. According to The New York Times, the growing debt level suggests Americans feel a rising optimism about the economy. Debt accounts for almost 70% of all economic activity in the country as it fuels new spending. It lets consumers invest in housing, vehicles and education — all things that can help create better financial security for families. However, this new borrowing peak also signals potential for increasing loan defaults, leading to a surge in consumer debt leads. That’s because overall household debt is now 15.1% above the 2013 Q2 bottom.
According to the Quarterly Report on Household Debt and Credit recently released by the Federal Reserve Bank of New York, aggregate household debt balances increased in the second quarter of 2017 for the 12th consecutive quarter. These debt balances are now higher than the previous $12.68 trillion peak seen in 2008’s third quarter.
As of June 30, 2017, total household indebtedness was $12.84 trillion — a $114 billion (0.9%) increase from Q1 2017.
Loan Delinquency Rates Are Driving More Consumer Debt Leads
Though aggregate delinquency rates were flat in Q2 2017, on June 30, 4.8% of outstanding debt was designated as delinquent. Of the $612 billion in debt that’s currently delinquent, $411 billion in delinquent payments are at least 90 days late.
Student loans, auto loans, and mortgages all saw modest increases in their early delinquency flows. At June’s close, 3.9% of auto loan balances were 90 or more days delinquent. And while student loan debt stayed flat, it now comprises 11% of total household debt. This is a noticeable increase from 5% of total household debt in 2008’s third quarter, putting more pressure on families.
Unsecured Loan Balances Are Up, Creating New Trends In Credit Card Debt Leads
Delinquency flows on credit card balances also ticked up notably in 2017, creating a new surge in unsecured debt leads. Since the late 1940s, total household debt steadily rose until the financial crisis put on the brakes in 2008. After that, household debt declined for 19 consecutive quarters in a row. Starting in 2013, debt rose again — now currently sitting at a new high and generating thousands of pre-qualified debt leads.
Non-housing loan balances were up for the last two years. Auto loans, which equaled about 9% of all household debt in 2017, grew by $23 billion (a 3% increase over 2008). Credit card balances increased by $20 billion, yet credit report pulls and student loan debt stayed flat. The aggregate credit card limit rose for the 18th consecutive quarter at 1.6%. Credit card balances increased by $20 billion in 2017, with even more debt leads looking for consolidation and settlement services.
The median credit score for originating auto loans dropped 8 points down to 698 this last year. Meanwhile, the median origination score for mortgages declined to 754.
Order Your Debt Leads Now to Beat the Initial 2018 Rush
Tracking notable trends like household debt can put you above the competition, so take action now. Families use debt to pay for things their incomes don’t support. This in turn leads many to seek help lowering their monthly payments. It’s a clear opportunity for those looking to buy debt leads for credit counseling, debt consolidation and debt settlement services.
As this year ends, we urge you to beat the rush for debt leads in 2018. Partner with LeadingResponse, and we’ll be happy to put together a lead generation strategy that fits your business growth goals. Need help optimizing your client acquisition process? Ask about our completely free, yet optional Lead Management System (LMS) software, which lets you monitor lead intake in real-time. Want to quickly grow your business by adding new practice areas, like serving tax, student loan or medical debt leads? Our U.S.-based call center staff is available to work your cold calls 24/7 and currently boasts a 70% contact rate.
To learn what LeadingResponse can do for your business, contact us today.