With fewer borrowers delinquent on one or more accounts, U.S. consumers' credit risk level dropped in the third quarter ended Sept. 30 to a mark not seen since the first quarter of 2009, according to TransUnion's Credit Risk Index (CRI) released Wednesday.

 The CRI fell 0.9% to 126.79 in the quarter, and is now 1.9% lower than a year ago.

 TransUnion officials cited lower outstanding debt levels as another key factor. 

"We are optimistic that, short term, [the CRI] will continue to experience small declines as consumer delinquency rates continue to decrease in response to improvements in the employment picture, and as consumers continue to focus on living within their current means," says Chet Wiermanski, global chief scientist at TransUnion. 

"However, as we move into the traditional holiday shopping season it will be interesting to see if this fundamental paradigm shift in consumer behavior represents a long term pattern or one that fades as the economy continues to slowly improve," he adds.

 At the end of the third quarter, 43 states and the District of Columbia saw declines in their credit risk indices, signaling that a broad improvement in consumer credit conditions is finally taking root, according to TransUnion. Only Maine, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota and Vermont experienced increases in their credit risk indices. Only two of these states, North Carolina and New Mexico, have a CRI above the national average. 

The states with the highest CRI remained the same with Nevada (163.85) slightly ahead of Mississippi (162.41) and Texas (159.88). Consistent with previous quarters, the least risky states are found in the Upper Midwest - with North Dakota coming in at 80.81 and Minnesota at 89.54.

 "The gradual decline [in the CRI], coupled with a 6.5% quarterly increase in the demand for credit, as reflected in TransUnion's 90-day Total Inquiry Index (TII), suggests that consumer credit activity will be stronger in terms of quality and volume," Wiermanski says.

 The TII is a new credit and monitoring service benchmarked to credit inquiry levels generated by consumers seeking credit in 2000. It is designed to help lenders identity pockets in the U.S. where consumer credit and general economic activity are advancing at a faster pace than other areas, according to TransUnion. The three states showing the greatest quarterly increase in credit demand as measured by the TII were Maryland, Massachusetts and Minnesota.

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