Hierarchy of Payments Fluid, Credit Bureau Says
Payment data analysis by TransUnion, a national credit reporting bureau, demonstrates consumers’ shift in loan payment habits, making auto loans the first major bill that gets paid each month.
The bureau drew its conclusion after noticing a continuing drop in auto loan delinquencies and conducting further examination of its data.
The first shift was a marked jump of the credit card in the hierarchy of payments, moving from the bottom of the list where it had been for years to the top. Becker attributed this shift to a number of different factors, including the perceptions among consumers that their houses were no longer necessarily steadily increasing assets even if they were not underwater on their mortgages. There was also an additional perception that having a valid and available credit card had become a very important part of maintaining liquidity, he argued.
“Prior to the recession, credits cards were often seen as something of a commodity,” Becker explained, “with credit terms relatively easy to meet and new offers coming almost every month, consumers felt less tied to any individual card.”