American consumers are continuing to pay off their outstanding debt and are maintaining low delinquency levels on their credit cards, reports www.reuters.com and the American Bankruptcy Institute’s newsletter, Bankruptcy Brief.
TransUnion, the third largest credit reporting bureau in the country, reports that its proprietary Credit Risk Index declined for the sixth consecutive quarter. Compared to a year ago, the CRI for the second quarter of 2011 decreased by 1.9% to 121.22. The CRI ascertains consumer credit risk levels and measures changes in consumer credit risk within various market segments.
Chet Wiermanski, global chief scientist at TransUnion, states, “’The lengthy, broad and steady decline in the Credit Risk Index, which reflects declines in consumer delinquency and debt levels, has placed the consumer credit market on a firmer footing. This responsible use of credit has given some lenders confidence to ease lending standards and invest more in the acquisition of new credit customers.’”
According to TransUnion’s TrendData, increased lending activity has been noted from banks and finance companies across revolving and installment loan categories for the past few quarters of this year. “’Increases in the percentage of consumers with new accounts with generally higher credit limits, coupled with lower utilization rates for revolving account types reflect a healthier balance of risk,’” Wiermanksi continued.
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