According to TransUnion, the firm’s Credit Risk Index increased .38 percentage points between the third and fourth quarters of 2009. That’s the smallest increase seen by the index since the end of 2008. The index reached 129.67 during the final quarter of last year.
“Based upon the Credit Risk Index it appears that we may have possibly reached a plateau for credit risk after five consecutive quarters of significant increases, suggesting that the financial recovery is beginning to take hold as consumers continue to adapt their lifestyle and debt management practices to navigate these difficult economic times,” said Chet Wiermanski, global chief scientist at TransUnion.
Wiermanski said that the firm expects consumers to take on less debt associated with things like credit cards, which means the index should remain level over the coming months. A recent report from the Federal Reserve Board shows that revolving consumer credit – much of which is made up by credit card debt, has dropped for a number of quarters.
The Fed said that the final quarter of 2009 saw revolving consumer credit drop at an annual rate of 13.3 percent. Overall last year the amount of that type of credit declined 9.6 percent.
Though the rate of increase in TransUnion’s Credit Risk Index did slow for the final quarter of last year, the firm also noted that the level reached at that time represented an all-time high. However, Wiermanski said that it is possible that the index could drop at the end of 2010.
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