Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Credit Trends: Predicting the Future using Credit Report Numbers
By Janet Dedrick
The news about the economy is confusing to say the least. One columnist predicts that we’re going to see the recession continue for another year, while an economist in another newspaper says that everything is getting better.
When economic data is released, like the weekly or monthly unemployment numbers, the media reports it any number of ways. We gained 290,000 jobs in April 2010, but the official number of unemployed Americans increased. How is anyone supposed to make sense of these numbers?
As an Equifax analyst, I get to see a lot of raw data that isn’t widely available. When I look at information on mortgage loans, student loans, and bank cards and see how consumers are handling their credit, trends begin to emerge.
The good news is that even with all the confusing and negative economic reports being released, I’m starting to see some positive trends.
Here’s what the data is telling me at the moment:
1. Early-stage delinquent balances are declining year over year. An early-stage delinquent balance is usually considered to be 30 days late, or one missed payment. A decline in early-stage delinquent balances is a sign that we’re moving toward more economic stability. Even better, I’m seeing the same decline in early-stage delinquencies across many types of credit, including mortgages, home equity lines of credit, bank cards, and auto loans. I’m thinking this could be a sign that people have more cash available and are paying more of their bills on time. As early stage delinquencies improve, late stage delinquencies – 120 days plus, or four or more missed payments – subsequently improve. Bankcard, auto loan, and home equity line delinquencies for early to late stage delinquencies are improving, with mortgage delinquency still the most troublesome spot.
2. There are higher numbers of some types of new lines of credit. Although it’s still somewhat sparse, we’re starting to see a pickup in auto loans corresponding to the increasing number of cars purchased. I think we have already hit the bottom of the cycle when it comes to auto loans, and now we’re seeing things move in the right direction. Of course, car sales were exceptionally low last year, so the year-over-year comparisons are going to look good. As of January/February 2010, we’re seeing an increase of 20 percent, or almost 200,000 new auto loans (for new and used cars) over last year.
3. Consumers are being smarter about their credit. The higher number of auto loans tells me that consumers are getting more confident about what’s going on in the world. You have to be confident to make a $30,000 or $50,000 car purchase. But consumers are also being smarter. The average size of an auto loan is $18,300, which is less than before the recession, so consumers are being prudent about taking on more debt.
4. The rate of decline for bank cards being issued is slowing. While we’re still seeing a decline in the number of bank-issued credit cards, the rate of that decline is slowing. To me, that’s a sign that we’re nearing the bottom, and I predict that we’ll see an increase in card issuance later this year. Credit expansion would be a good thing for consumers.
What are you seeing? Are your creditors still cutting back on your credit card available balance or your home equity lines of credit? Leave your comments and questions here, and we’ll see if we can make sense of some of the confusing data you see in the news.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.