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TransUnion: Credit risk drops in first quarter
By Marvin Milner on May 5th, 2010
Decreasing risk in the credit market may lead to financial institutions to open more loans up to consumers, which would mark a shift from the effects of the recession.
Recently, TransUnion reported that its Credit Risk Index dropped during 2010's first quarter. The index fell from 129.67 to 128.82 during that time, the first decline seen since 2008's third quarter.
"We are cautiously optimistic that the Credit Risk Index will continue to experience small declines as consumers keep reducing their debt burden and remain current on their existing credit obligations," said TransUnion global chief scientist Chet Wiermanski.
Paying bills on time while reducing the amount consumers owe are some of the basic ways they can appear more worthy of financial products, including credit cards and home loans. These practices should increase a person's credit score, which is one of the tools used by companies to determine risk.
However, some people may be having trouble reducing what they owe, especially since the recession and new credit card regulations led to increases in interest rates. One option these consumers may consider is a debt management plan, which can help cut down what is owed in a smaller period of time.
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