Households Stay Out of Financial Distress for Two Straight Quarters

Based on the stronger performance of the consumer distress index, ""CredAbility"":http://www.credability.org/en/homepage.aspx said the ""stage of strong holiday spending"" may be set.

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With a score below 70 indicating a state of financial distress, the distress index sat higher at 70.5 out of 100 in the third quarter. In the second quarter, the index was also above 70 at 71.3. For the first time since early 2008, the credit counseling agency says consumers have managed to stay out of financial distress for two consecutive quarters. A year ago, U.S. households scored 66.69.

The agency explained the ability of households to manage credit ""wisely"" helped consumers stay out of distress.

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""For the first time in four years, the average U.S. household is able to spend during the holiday season without taking on new debt or creating a major financial problem,"" EVP for CredAbility Mark Cole said in a release.

Five categories are considered when measuring consumer distress: employment, housing, credit, how families manage household budgets, and net worth.

Out of 77 large metros the index tracks, all but three posted higher scores year-over-year. The three all happened to be located in upstate New York: Buffalo-Niagara Falls, Albany, and Rochester.

CredAbility also found that out of the 30 largest metro areas, 17 were in a state of distress, while Baltimore and St. Louis managing to rise out of distress in Q3.

The most stressed out metros continued to be Orlando and Tampa-St. Petersburg, which scored 59.71 and 60.74, respectively.

Among the higher-scoring large metros, Washington D.C. led others with a score of 76.78 and was closely followed by Minneapolis-St. Paul (76.70) and Boston (76.17).

The states with the highest scores were North Dakota (84.94), South Dakota (83.12) and Wyoming (79.81). The most distressed states were Nevada (62.09), Mississippi (65.54), and Michigan (66).

CredAbility offers a test online to measure financial health or distress at ""CredAbility.org/ConsumerDistressIndex"":http://www.credability.org/en/about-credability/media-center/Consumer-Distress-Index/default.aspx.