Credit situation improves for consumers during Q2

Consumer credit demand rose during the second quarter.

Many commercial property companies may be encouraged that more consumers experienced better credit conditions during the second quarter. A report from TransUnion showed that the level of credit delinquencies for consumers dropped during the second quarter, while more people took on more credit.

The credit bureau explained that new consumer credit demand rose by 21 percent during the second quarter when compared to the same quarter last year, according to the Total Inquiry Index. This was the highest level since the third quarter of 2007.

Charlie Wise, the director of research and consulting for the credit bureau's financial services unit, explained that the heightened credit request level may show that consumers are gaining confidence and looking to make more significant purchases and investments.

Credit risk levels fall
The Credit Risk Index fell to 122.03 during the quarter, which was down nearly 1.6 percent from the 123.98 recorded during the first quarter, TransUnion explained. However, it was still approximately 0.7 percent higher than the second quarter of last year.

"After upticks in the prior two quarters, it was good to see the credit risk level decline this quarter to roughly the same level it was last year," said Charlie Wise, director of research and consulting in the financial services business unit for TransUnion. "Delinquency rates for major loan types have all declined in the first half of 2012, and that contributed to the drop in the risk index in the second quarter."

California, Arizona and Nevada all had consumer credit risk levels fall during the quarter, the report said. This may have been a surprise, as these areas struggled the most during the economic downturn. Additionally, South Dakota had the largest decline from the second quarter of 2011, as the state's figure fell by nearly 4 percent. Illinois and Mississippi experienced declines of 3.28 and 1.96 percent, respectively.

Delinquency rates also showed positive signs during the second quarter. The report explained that past-due consumer loan levels for automobiles, bank cards and mortgages declined compared to the previous quarter, which was a repeat of the first quarter's positive performance. When examining the second quarter's performance compared to the same period last year, each loan type had delinquencies drop or remain level.

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