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Consumers Taking Bigger Role in Protecting Their Credit

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When it comes to consumers’ attitudes about credit, many have changed their approaches to keeping theirs healthy over the last few years. These days, experts are seeing more people with troubled credit histories regularly checking their standing.

Many consumers now keep track of their credit more closely than they did prior to the onset of the recent recession, though new evidence suggests that it’s actually those who have suffered in the past who are more likely to keep tabs on their standing now, according to a new study from the credit monitoring bureau TransUnion. In fact, 50.4 percent of those who regularly checked their credit documents during the past two and a half years had subprime credit scores, compared with just 40.1 percent of those who didn’t keep close track of their standing.

This was also reflected in delinquency rates on new auto loans and credit cards, the report said. In all, those who regularly check their credit were 60 days or more behind on their car loan payments 2 percent of the time, compared with 1.5 percent of those who didn’t monitor their standing. Similarly, 90-day delinquency on credit cards among the former group stood at 2.5 percent, in contrast with just 1.9 percent of the latter.

“We assume the [people who monitor their physical fitness] generally fall into two categories: healthier people who want to stay that way, and less healthy consumers who want to become fit,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. “We have found that consumers who monitor their credit tend to fall into two similar groups: credit-healthy consumers who wish to maintain that health and/or guard against identity theft; and riskier consumers that are looking to take proactive measures to better manage their credit profiles in anticipation of acquiring additional credit.”

However, TransUnion believes that this actually speaks well for those who don’t always monitor their credit, rather than poorly for those who do, the report said. Often, those who are more proactive might be because they have fallen on difficulties and are looking to rebuild their standing, and those who don’t may be comfortable with where they are.

Consumers have generally been more conscientious about cutting their instances of late payments in the last several years, and that’s reflected in the near-record lows in both delinquency and default seen today.

Image: paalia, via Flickr

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