TransUnion Credit Risk Index for U.S. Consumers Reaches Record Level

Statistic which measures changes in credit risk increased 5 percent in last
year

CHICAGO, April 29 /PRNewswire/ -- Today TransUnion released the first
installment of an ongoing analysis of the TransUnion Credit Risk Index
(Index), a statistic developed to measure the changes in consumer credit risk
within various geographies. The Index reached 124.79 in the fourth quarter of
2008, marking its highest value since the inception of this metric ten years
earlier. The increase was especially sharp on a quarter-over-quarter basis,
with the nation experiencing a 5.99 percent increase between the third quarter
of 2008 (117.74) and the conclusion of last year (124.79). The Index is
defined as the weighted average forecasted incidence of 90-day delinquency or
worse of a given region relative to the nation as a whole.

"Because of the manner in which most credit scores are constructed, one cannot
simply take the average of a pool of credit scores to get a measure of average
credit risk--that is, the likelihood of defaulting on a loan," said Chet
Wiermanski, group vice president and global chief scientist, Analytics and
Decisioning Services. "TransUnion developed the Index to account for the
non-linearity of credit scores, to provide an easy and intuitive means of
measuring changes in regional risk--and comparing risk levels across
regions--over time."

The Index uses the fourth quarter of 1998 as a baseline for comparison. Thus,
the Index measures changes in consumer credit risk relative to the nation as a
whole at the end of 1998, which might be considered a representative year of
credit performance within the usual dynamic of the historical credit cycle. A
value of more than 100 represents a higher level of risk.

TransUnion's Index indicates that the inherent level of credit risk within the
U.S. is now 24.79 percent higher than the level reflected in TransUnion's
consumer credit database on December 31, 1998. The Index experienced a 5.41
percent increase in 2008, rising from 118.38 in the fourth quarter of 2007 to
its current level.

TransUnion's Index reflects the distribution of consumer credit risk as
measured by TransUnion's TransRisk Account Management Credit Risk Model and is
a key metric within TransUnion's Trend Data database. For comparison purposes,
the Index in recent years has generally ranged between 110 and 120,
experiencing a one- or two-point shift between quarters.

"The current level of the TransUnion's Credit Risk Index represents the
turbulence and the economic hardships faced by consumers in today's volatile
economy," said Wiermanski. "The nearly 6 percent quarterly increase within the
Index by the conclusion of 2008 is noteworthy not only in hitting a record
high, but also for the magnitude of the increase, reflecting in part the
impact of the current recession on the credit health of consumers."

Interestingly, the credit risk level of the current recession has not yet
increased at the rate experienced during the 2001 recession. Since December
2007, the Index has increased 4.98 percent (from 118.38 to 124.79); while
during the 2001 recession it experienced a 6.85 percent increase (from 107.19
to 114.54). Because the current recession has not yet bottomed out, TransUnion
expects the Index to continue to increase in the early part of 2009,
potentially eclipsing the percentage increases from earlier in the decade.

On a year-over-year basis, Arizona (11.70 percent increase), Nevada (11.49
percent) and California (11.42 percent) had the highest percentage increases.
However, when reviewing the 50 states and the District of Columbia, only 19
states experienced higher percentage increases than the national average
increase.

"Not surprisingly, it appears that states that have been impacted the most by
the mortgage crisis are also generally experiencing the greatest increases in
Index levels," said Ezra Becker, director of strategy and consulting in
TransUnion's financial services group. "However, TransUnion is cautiously
optimistic: more than half of the country experienced increases less than the
national average, perhaps indicating that consumers are indeed becoming more
cautious in their use of credit, which in turn may temper future Index
increases."

When reviewing the highest and lowest Index levels in the nation, Mississippi
(164.72), Texas (161.59) and South Carolina (155.95) ranked highest. States
with the traditionally lowest levels include North Dakota (79.67), Minnesota
(86.76) and Vermont (91.34).

"It's important to note that the Index reflects the impact of many forces on
consumers' ability to pay their debt obligations, including the regional cost
of living, unemployment, consumer liquidity, and so forth. From a 'real-world'
perspective, TransUnion's Index is therefore particularly insightful for
lending institutions. These institutions can use the Index to better track the
credit risk trends of the regions and communities across the country where
they either already have an existing footprint or are looking to expand, and
the associated implications for acquisition and portfolio management
strategies," added Becker.

TransUnion's Trend Data database
The source of the underlying data used for this analysis is TransUnion's Trend
Data, a one-of-a-kind database consisting of 27 million anonymous consumer
records randomly sampled every quarter from TransUnion's national consumer
credit database. Each record contains more than 200 credit variables that
illustrate consumer credit usage and performance. Since 1992, TransUnion has
been aggregating this information at the county, Metropolitan Statistical Area
(MSA), state and national levels.

About TransUnion
As a global leader in credit and information management, TransUnion creates
advantages for millions of people around the world by gathering, analyzing and
delivering information. For businesses, TransUnion helps improve efficiency,
manage risk, reduce costs and increase revenue by delivering comprehensive
data and advanced analytics and decisioning. For consumers, TransUnion
provides the tools, resources and education to help manage their credit health
and achieve their financial goals. Through these and other efforts, TransUnion
is working to build stronger economies worldwide. Founded in 1968 and
headquartered in Chicago, TransUnion employs associates in more than 25
countries on five continents. www.transunion.com/business

SOURCE TransUnion

Dave Blumberg of TransUnion, +1-312-972-6646, dblumbe@transunion.com