In a sign that the credit market may finally be stabilizing, new data from TransUnion revealed that consumers were less of a credit risk
during the fourth quarter of 2010 than they were at any time in the previous nine months of the year. TransUnion's Credit Risk Index slipped by 0.9 percent during Q4 2010, falling to an overall rating of 125.61 for the fourth quarter. That is the lowest the rating has stood since the fourth quarter of 2008, when the recession began to truly take hold of the national economy. Meanwhile, credit demand also fell during Q4 2010. The company's Total Inquiry Index dropped to 67.6 during the fourth quarter, representing a 5.7 percent slowdown in the demand for credit. That comes after reductions of 16.5 percent between Q4 2007 and Q4 2008, and 19.3 percent between Q4 2008 and Q4 2009. "The gradual decline in the Credit Risk Index, coupled with a 5.4 percent decrease in the demand for credit over the previous year, as reflected in TransUnion's Total Inquiry Index, suggests that consumers are relying more on existing credit or switching to cash or debit cards," Chet Wiermanski, global chief scientist at TransUnion, said in a statement. Levels of credit risk and demand by state continue to remain true to previous quarters. In order, Nevada, Mississippi and Texas were the three states rated highest in risky consumer credit. Florida, Nevada and Virginia were the three states where credit demand was the lowest.