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Debt management plan may help lower interest as index shows consumers trying to rely less on credit cards
By Marvin Milner on Mar 17th, 2010
A TransUnion index that measures credit risk among consumers increased slightly, indicating people are trying to deal with their debt.
The firm's Credit Risk Index increased 0.38 basis points, rising from 129.29 to 129.67 during the fourth quarter of last year. Anything above 100 on the scale indicates a higher level of risk, with the fourth quarter of 1998 used as a basis for the index.
On a state-to-state level, Mississippi was the state with the most risk at 169.22. Nevada came in second, while Texas rounded out the top three. States such as North Dakota, Minnesota and Vermont presented lower risk levels during the quarter.
The overall increase in the Credit Risk Index between the third and fourth quarters is the lowest number posted since the end of 2008, TransUnion said.
"We anticipate the Credit Risk Index will remain flat as consumers continue to take on less bank card debt and as employment conditions improve," said Chet Wiermanski, global chief scientist for firm.
Though numbers from the Federal Reserve Board show that consumers have concentrated on reducing their credit card debt over the past few quarters, some consumers may still be finding it difficult to pay off what they owe. One option these people may consider is a debt management plan, which could help lower the amount of interest they pay.
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