Consumers whose credit trouble comes largely from a mortgage default, rather than delinquency across numerous accounts, are less likely to run into trouble when attempting to reduce debt on new accounts.
Those consumers who have experienced defaults only on their mortgages allow new credit card accounts to fall delinquent far less often than those who have a history of delinquency on several types of accounts, according to new data from the credit monitoring bureau TransUnion. Just 11.4 percent of mortgage-only defaulters fell 60 days or more behind on new credit card payments, compared with 27.1 percent of those with a history of delinquency.
"The analysis of consumer preferences between products and how they manage and prioritize them is important information lenders need to leverage to effectively manage their customer relationships," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "This study affords lenders greater insight into consumer performance, hopefully leading to a more mutually profitable, long-term relationship between lender and borrower."