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U.S. consumers' credit risk level across all types of loans continued to grow in the second quarter, setting an all-time high for the third consecutive period, according to TransUnion's Credit Risk Index.
The index, a statistic developed to measure changes in average consumer credit risk within various geographies, was 128.32 for the quarter ended June 30, up from 127.26 for the previous quarter and up from 120.89 in the second quarter of 2008.
"After several quarters of significant increases in the Credit Risk Index, it appears that consumers are adapting their financial management approaches to cope with the difficult times we are experiencing," Chet Wiermanski, TransUnion's global chief scientist, said of the index.
"However, the nation's credit risk level remains at the highest it's been this decade, and though the level needs to decrease to reflect a strong lending environment, the deceleration of the growth in the index is a positive sign," Wiermanski said.
By state, Mississippi's index continued to be the highest at 166.21, followed by Nevada at 162.74 and Texas at 162.21. The least risky states, according to the index, were concentrated in New England and the Upper Midwest, with North Dakota at 82.24, Minnesota at 89.67 and Vermont at 92.44.
The states that experienced the largest quarterly increases included Florida at 2.67%, Oregon at 2.65% and Nevada at 2.37%. Of the 13 states experiencing quarterly decreases, Delaware, New Mexico and Montana had the largest declines at 0.8%, 0.62% and 0.6%, respectively.
"While we are expecting the CRI to continue to increase for the remainder of 2009, we also anticipate a greater number of states to show improved risk levels in the coming months," Wiermanski said.
The Chicago-based credit bureau set the index at 100 in 1998. An index of more than 100 represents a higher level of relative risk. The index is based on TransUnion's Trend Data, a database consisting of 27 million anonymous consumer records randomly sampled each quarter from TransUnion's national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance.
