Unpaid debts grow: California vs. US

If you want to get worried about the economy, look at who isn’t paying their bills.

My trusty spreadsheet’s review of the Federal Reserve Bank of New York’s first-quarter study of credit files found a growing inability to make timely debt payments.

The data tracks debts – including mortgages, credit cards, auto and student loans – in 11 big states and the nation going back to 2003. These statistics only consider individuals with credit histories - roughly 90% of the population.

To start 2026, this math shows 2.1% of California consumer debts were 90 days or more late. That’s the highest since 2020’s first quarter – just as the pandemic was beginning to upend the economy.

Now, this is still below the 3.5% average dating back to 2003, and the skipped-payment peak of 12.6% in 2009’s fourth quarter amid the Great Recession.

Still, it’s an unnerving trendline. The good news, for California, is that Golden Staters are better than most Americans at paying their bills. Nationwide, 3% of consumer debt was delinquent in the first quarter, the highest since 2020’s first quarter.

And just like California, this tardiness remains historically modest. It’s less than the 3.7% average since 2003, and nowhere near the peak of 8.6% in 2010’s first quarter.

Also, ponder poor bill-paying habits within two California arch-rivals.

Texas had a 4.2% delinquency rate in the first quarter, the highest since 2014’s second quarter. While a 3.9% delinquency rate to start 2026 is off from the recent high of 4.13% in 2025’s second quarter, it’s the state’s highest since 2019’s second quarter.

Early 2026’s skipped bill payments reveal a financially stressed consumer with monetary headaches that are, for now, problematic but manageable.

Making the mortgage

Think about one large subset of this problem: tardy mortgage payments.

Just 0.7% of California mortgage balances are late. Yes, that’s the highest since 2020’s first quarter, but it’s a delinquency pace that’s off from the 2.7% average of the last 23 years and the peak of 13.2% in 2009’s fourth quarter.

Nationwide, 1.1% of home loans are late, the highest since 2018’s second quarter, but below the 2.6% long-term norm and the 2010 first-quarter peak of 8.9%.

In Texas, mortgage delinquencies at 1.5% at the start of 2026 were the highest since 2015’s first quarter. Florida’s 1.6% first-quarter delinquency rate was just below the 1.7% recent high in 2025’s third quarter, which was the highest since 2018’s fourth quarter.

Less borrowing

Another sign of consumer financial stress is a slowdown in loan usage.

California’s $87,710 in consumer debt per capita in the first quarter was up just 0.1% over the year. That is a far slower pace of new debts compared with the 3% six-year growth rate.

Similar cooling was seen nationwide. U.S. per capita debts of $63,545 were up 2% in a year vs. a 4% six-year growth rate.

Texans have $60,710 debts per capita, up 3% in a year vs. a 5% six-year growth rate. And Floridians owe $62,500 per capita, up 2% over the past year, compared with a 5% growth rate over the past six years.

What’s the score?

Despite the often oppressive cost of California living, the state’s residents surprisingly carry above-average credit scores.

Contemplate stats from Fair Issac, the creator of the FICO credit score, to judge California’s bill-paying habits on a national level. Bankers use these credit grades to estimate their chances of being repaid by borrowers.

The stats show the average Californian has a credit score of 723 – just above the 50-state median of 722 and the 21st-highest among states.

If you didn’t know, credit scores range from a high of 850 to a low of 300, with California’s score falling within the “good” range.

Top scores were found in Minnesota at 742, Vermont at 740, Wisconsin at 739, New Hampshire at 738 and Washington state at 736.

The lowest scores were in Mississippi at 676, Louisiana at 686, Alabama at 691, Georgia at 692 and Oklahoma at 695.

As for California’s economic rivals, the typical Texan’s score was 695, ranking No. 45. A Floridian? 705, ranking No. 38.

The bill-paying abilities of Californians have also been improving at an above-average pace. Look at the recent scores compared with 2020.

California’s average rose by 7 points, tying with six states for the ninth-biggest improvement, including Texas. Florida was up 4, the No. 35 gain. The median state move was a five-point improvement.

Biggest improvements? Maine, up 12; Idaho, up 11; and New Mexico and South Carolina, up 10.

Smallest improvements? Mississippi, up 1, and Nebraska, Pennsylvania and Louisiana, up 2.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

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