TransUnion today announced that its proprietary Risk Index is the lowest it has been in five years in the United States, and the median consumer credit score has grown sharply since last year.
The TransUnion Risk Index measures the relative risk of default with the lower the value the better the credit risk. The Index has improved from 120 in 2000 to 109 in 2005.
TransUnion announced that the median consumer credit score has risen six points – from 676 to 682 – since the first quarter of 2004. Consumer credit scores have gradually been rising over the last two years, but this marks the first substantial increase since the second quarter of 2000.
“Changes in the TransUnion Risk Index are a reflection of a variety of factors that include population shifts, regional and national economic conditions and location-specific trends in lending and credit usage,” said Chet Wiermanski, vice president of Analytics for TransUnion. “And while the TransUnion Risk Index is important, its true value to risk managers comes when it is coupled with our other research capabilities and services.”
The data behind these figures come from TransUnion’s Trend Database, which consists of a quarterly snapshot of 25 million anonymous consumers randomly sampled from TransUnion’s national consumer credit database. Each consumer record contains more than 200 credit variables that illustrate consumer credit usage and performance. Information has been aggregated at the county, Metropolitan Statistical Area (MSA), state and national level since 1992 and is available to TransUnion business customers.
Chicago-based TransUnion offers a range of financial products and services that enable customers to manage risk and capitalize on market opportunities.
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