Â Â Â Credit Risk
Data released by TransUnion says U.S. consumers are less of a credit risk than they have been in nearly two years. TransUnionâ€™s proprietary Credit Risk Index (CRI) decreased by 0.9 % in the fourth quarter of 2010, from 126.79 to 125.61.
On a year-over-year basis the CRI is now 3.13 % lower than it was at the end of 2009.
At the end of the fourth quarter of 2010, 49 states and the District of Columbia had experienced declines in their credit risk indexes, which the company believes is a signal of broad improvement in consumer credit conditions.
Only Wisconsin experienced an increase in CRI during the fourth quarter of last year. But at 111.61, Wisconsinâ€™s CRI is well below the national average.
Also down is credit demand, as measured by TransUnionâ€™s Total Inquiry Index (TTI). The index decreased to 67.6 in Q4 2010, a decline of more than 5 % from Q4 2009. The TTI declined in 42 states and the District of Columbia during the fourth quarter of last year.
The gradual decline in the Credit Risk Index, coupled with a 5.4 % decrease in the demand for credit over the previous year, as reflected in TransUnionâ€™s Total Inquiry Index, suggests that consumers are relying more on existing credit or switching to cash or debit card. While more consumers will have stronger credit profiles making them attractive to credit marketers, the underlying demand for credit appears to still be soft.