TransUnion, one of the three major credit bureaus, released their latest quarterly Auto Insurance Risk Index (IRI).  This Index is a barometer for the auto insurance industry and is related to expected insurance loss from auto claims. TransUnion’s Auto Insurance Risk Index decreased for the past four quarters and increased .03 percent in third quarter 2011 to an Index of 98.85, compared to an index of 98.82 in second quarter 2011.  It was .31 percent lower than a year earlier with an index of 99.46.   At the peak of the recession (second quarter 2009), the index was 99.58. read more »

I have discussed strategic defaulters in previous blogs.  To refresh your memory, strategic defaulters stay current with their debts but default on their mortgage because they have negative equity or are “upside down.”  They can afford to pay their mortgage, but choose not to do so.

FICO study

FICO conducted research on strategic defaulters compared to those that go delinquent (90 days or more late).  They identified the following characteristics:

Strategic defaulters have a higher FICO score and have had good payment history.

They haven’t used much of their credit limit on their credit cards, so their utilization is low. read more »

I have discussed payday lenders in previous blogs and how much of a rip-off they are. Did you know that some banks and credit unions offer short-term loans to compete with payday loans?   These loans have many different names such as short-term, emergency, direct deposit advance and account advance loans.  They are usually for a short period of time and let you borrow up to $500.

Banks and credit unions don’t usually lend money to customers for emergency purposes.  Now there are more consumers without credit cards or savings accounts, who don’t have the funds to pay for an emergency. Banks and credit unions are offering these loans more than in the past. read more »

TransUnion, one of the three credit reporting agencies, analyzes their consumer database quarterly to determine how credit active consumers manage mortgages, credit cards and auto loans.  This analysis is called the “TransUnion Trend Data”; the latest study was from third quarter 2011 (Q3 2011).  Credit card delinquencies and the average credit card balance increased from the prior quarter, while delinquencies and debt decreased from a year ago.

Delinquency rate

The national credit card delinquency rate (more than 90 days past due) was .71 percent in Q3 2011, compared to .6 percent in Q2 2011 or an 18.3 percent increase. This was the first increase since fourth quarter 2009.  The Q3 2011 delinquency rate was a decrease of 14.46 percent from the .83 percent rate a year ago. read more »

First, what is auto loan yo-yoing?  You purchase a car and drive away with the car thinking that the loan has been approved. The dealer calls you to inform you that the financing has fallen through and you need to renegotiate. This scam is called yo-yoing because it seems as though the car is tied to a yo-yo string and the dealer can get it back. Individuals with poor credit are subject to this scam; they aware they have poor credit and can’t get the best interest rates.

How it works read more »

Wells Fargo hired Harris Interactive Inc. (HPOL) to conduct a nationwide phone survey about retirement. During August and September 2011, they surveyed 1,500 consumers between 25 and 74 years old.  The responders’ household income or assets ranged from $25,000 to $100,000. They planned to work longer to have enough money in retirement.

Highlights

76 percent of responders said it is more important to reach a specific dollar amount before retiring, while 20 percent said it is more important to retire at a certain age regardless of savings. read more »

Equifax, one of the three recognized national credit reporting agencies, conducts a monthly report called the “Equifax National Credit Trends Report.” It uses Equifax data from more than 585 million consumers and 81 million businesses worldwide.  The latest report released in November 2011 was based on July 2011 data. The largest increase in new auto loans in the past two years was from auto finance companies, than from banks and credit unions.  This increase included both prime and subprime borrowers; subprime borrowers are those below an Equifax score of 640.

Report Highlights

In July 2011, 1.7 million auto loans were originated totaling $32 billion.  The breakdown was 51 percent from auto finance companies and 49 percent from banks and credit unions. read more »

PriceGrabber, a division of Experian (one of the three credit reporting agencies), conducted their first winter holiday shopping survey.  It was conducted from September 7 to 15, 2011 on 3,070 U.S. online shoppers.  Almost all plan to spend the same or less than last year and are looking for bargains. Approximately 49 percent of those surveyed plan to spend the same amount in 2011 as they did in 2010, 45 percent plan to spend less and 7 percent plan to spend more.  Most (68 percent) attributed the economic climate to their spending. read more »

Equifax, one of three consumer credit reporting agencies that houses over 200 million consumer credit reports and markets and sells consumer credit scores, released their latest National Trends Report the end of September. Equifax used data from their consumer and business databases to provide consumer credit information on the following markets: auto, banking, credit cards, mortgage and student loans. The study showed growth in auto and bankcard. There was more new credit available in the first half of 2011 (January thru June 2011) compared to the last two years.  There was $370 billion in new credit available from January to June 2011, compared to $327 billion in the same period in 2010, and $338 billion in the same period in 2009. read more »

Professional Risk Manager’s International Association (PRMIA) conducts a quarterly on-line survey for FICO. The most current one surveyed 188 bank professionals in August 2011. The bankers expected delinquencies to increase for consumer loans, underwriting would become stricter and the housing market would continue to struggle.  More than 48 percent feared the U.S. was heading into another recession. They expected delinquencies to rise for auto loans, student loans, mortgages and credit cards in the next six months.  Almost half thought it will take five years for credit card balances to reach pre-recession levels and nine years for housing to reach pre-recession levels. read more »