Delinquency Rates Generally Improve in Fourth Quarter 1999; Trans Union Releases Quarterly Aggregate Consumer Credit Information.

Business Editors

CHICAGO--(BUSINESS WIRE)--Feb. 9, 2000

Borrower delinquency rates generally continued to decline in the fourth quarter of 1999, according to a report issued today by Trans Union LLC. The report is based on consumer credit information gathered from TrenData(TM), Trans Union's advanced new database of aggregated time series credit bureau information.

According to the report, the percentage of mortgage holders that are 30 or more days delinquent was virtually the same in the fourth quarter of 1999 as in the fourth quarter of 1998. The percentage of installment credit borrowers that were 30 or more days delinquent dropped by 44 basis points in the fourth quarter, compared to one year earlier, while the revolving borrower delinquency rate dropped by 48 basis points.

Mortgage account balances continued their strong growth, with the average balance increasing 5.4 percent versus last year. The average revolving credit balance grew a more modest 1.8 percent compared to last year, while the average installment account balance stayed roughly flat.

Chet Wiermanski, Vice President of Trans Union's Analytical Services division, said that the low delinquency rates and growing debt should be expected because the economy is so healthy. &uot;It's no surprise that mortgage debt is still growing strongly,&uot; Mr. Wiermanski said. &uot;Even though mortgage interest rates have increased in the last several months, they are still relatively low. The US Commerce Department's data shows disposable personal income grew by 5.8 percent between December 1998 and December 1999, not adjusting for inflation. Consumer confidence is high. The unemployment rate for the fourth quarter of 1999 averaged 4.1 percent and the rate for January 2000 was 4.0 percent. The unemployment rate has not been this low since January 1970. Therefore home sales are still very strong and home prices are appreciating. The record US economic performance has driven mortgage debt to record highs as well.&uot;

Mr. Wiermanski is not concerned that consumers are taking on an unusually large amount of debt relative to today's economic conditions or that consumers' indebtedness poses any special threat to the economy. &uot;We recently analyzed the Federal Reserve's data on total household debt and found that after adjusting for inflation, total household debt is growing at rates very close to historical averages for this stage of the business cycle,&uot; Mr. Wiermanski said. &uot;The good times won't last forever--the United States will have another recession some time in the future. Of course delinquency rates and bankruptcy rates will increase when the economy slumps, but that is normal behavior too. The Credit Research Center at Georgetown University is using TrenData to analyze modern consumer credit behavior, and we hope that their research will help us better understand the possible impact of the next recession on consumers' credit behavior,&uot; he said.

Mr. Wiermanski emphasized that even though Trans Union and the Credit Research Center are attempting to help consumer credit grantors plan better for the next economic downturn, they are very happy with the current economic and consumer credit situation. &uot;We are not in the macroeconomic forecasting business. We aren't trying to predict when the good times will end. We are just trying to help consumer credit grantors understand their current business environment and plan more effectively for future changes to it,&uot; he said.

The TrenData database consists of quarterly snapshots of 24 million anonymous consumers randomly sampled from Trans Union's national consumer credit database. The database contains over 360 credit variables that illustrate consumer credit usage and performance. Data aggregations are available at the county, Metropolitan Statistical Area (MSA), state and national levels. TrenData's time series begin with the first quarter of 1992, and subsequent quarterly samples are available within 45 days of the close of a quarter.

Trans Union intends to update this report quarterly on the schedule below. Trans Union will post the release schedule, historical data and each quarter's report on the TrenData Internet site, http://www.trendatatu.com.

Trans Union is one of the nation's leading consumer credit information companies with owned and independent credit bureaus in all 50 states. The company provides a broad range of industries with products and services, including credit reports, risk scoring models, target marketing systems, pre-employment evaluation reports, skip tracing and search tools, and customized lists, as well as products that service both equity and first mortgage lenders and other information-based products.

For more information contact Trans Union LLC at [phone] or visit the company's Web site: http://www.transunion.com or TrenData's site: http://www.trendatatu.com.

2000 Release Schedule for Credit Conditions of US Consumers
-----------------------------------------------------------
Quarter                             Release Date(1)
-------                             --------------
First Quarter 2000                  May 10, 2000
Second Quarter 2000                 August 9, 2000
Third Quarter 2000                  November 8, 2000
Fourth Quarter 2000                 February 7, 2001

(1) Release dates are subject to change.


                              Data Tables

Note: Data are not seasonally adjusted.

Average Balance per Active Account
----------------------------------
          All Credit       Mortgage     Installment       Revolving
          ----------       --------     -----------       ---------
Q3 1998       $7,850        $83,160         $10,510          $1,130
Q4 1998       $7,940        $84,030         $10,580          $1,120
Q3 1999       $8,700        $88,080         $10,910          $1,190
Q4 1999       $8,350        $88,530         $10,570          $1,140

Average Number Active Accounts per Consumer that Actively Uses
--------------------------------------------------------------
  Given Credit Type
  -----------------
          All Credit       Mortgage     Installment       Revolving
          ----------       --------     -----------       ---------
Q3 1998         5.44           1.18            1.70            4.56
Q4 1998         5.43           1.19            1.72            4.53
Q3 1999         5.21           1.19            1.72            4.29
Q4 1999         5.40           1.19            1.78            4.46

Average Number Active Accounts per Consumer with Active Credit File
-------------------------------------------------------------------
          All Credit       Mortgage     Installment       Revolving
          ----------       --------     -----------       ---------
Q3 1998         5.44           0.36            0.74            4.06
Q4 1998         5.43           0.36            0.75            4.05
Q3 1999         5.21           0.37            0.76            3.81
Q4 1999         5.40           0.36            0.80            4.00

Market Penetration
------------------
(Percent of Consumers with Active Credit Files that Have at Least
    One Active Account of Given Credit Type)
          All Credit       Mortgage     Installment       Revolving
          ----------       --------     -----------       ---------
Q3 1998        (100%          30.6%           43.8%           89.2%
Q4 1998           by          30.4%           43.6%           89.3%
Q3 1999        defi-          30.8%           44.5%           88.8%
Q4 1999       nition)         30.2%           44.7%           89.7%

30+ Day Borrower Delinquency Rates
----------------------------------
(Percent of Active Users of Given Credit Type Currently 30 or More
  Days Delinquent on at Least One Account of Given Type)
            Mortgage    Installment       Revolving
            --------    -----------       ---------
Q3 1998        2.85%          6.86%           5.62%
Q4 1998        2.92%          7.19%           5.71%
Q3 1999        2.84%          6.92%           4.98%
Q4 1999        2.93%          6.75%           5.23%

Consumers with Delinquent Payments in their Credit Histories
------------------------------------------------------------
(Consumers With Active Credit Files Who Have Been Delinquent
   on at Least One Account in the Last Four Years by...)
            30 or More Days        60 or More Days
            ---------------        ---------------
Q3 1998         51.7%                  37.3%
Q4 1998         51.4%                  37.1%
Q3 1999         50.8%                  36.6%
Q4 1999         50.5%                  36.7%

Explanation of Terms and Concepts

1) Active Accounts

A mortgage or installment account is &uot;active&uot; if the account has an outstanding balance and has been verified by the lender in the last 12 months. A revolving account is &uot;active&uot; if the account has some type of activity reported by the lender in the last 12 months. Revolving accounts do not necessarily have to have an outstanding balance to be classified as active. 2) Consumers with Active Credit Files

A consumer has an active credit file if he or she has at least one active account. Consumers having only derogatory public records, collection actions, or employment inquiries are not considered to have &uot;active&uot; credit files. 3) Consumers that Actively Use a Type of Credit

A consumer is an &uot;active&uot; user of a given credit type if he or she has at least one active account of that type on his or her credit file, regardless of whether or not the account is a joint account. 4) Installment Credit

We use &uot;installment credit&uot; as an abbreviation for non-mortgage closed-end installment credit throughout this report. This credit category includes credit extended for a given amount that consumers must repay over a set period of time, other than mortgage credit. Examples include auto loans and many loans extended by sellers of durable consumer products. Installment credit accounts for about 20% of consumers' outstanding debt. 5) Mortgage Credit

This category includes credit secured by residential real estate. Mortgage debt comprises about 70% of consumers' outstanding debt. 6) Other Credit

There is a small amount of credit that is not secured by residential real estate and that is neither installment credit nor revolving credit. An example is open credit extended by retailers. We do not include data on this type of credit in this report. Other credit is responsible for less than one-half of one percent of consumers' total debt. 7) Revolving Credit

This credit category includes credit that the consumer can repay over a number of periods and for which the amount of credit is not pre-determined. Of course, credit limits generally restrict the maximum amount a consumer can borrow. Examples include bank credit cards and credit cards issued by retailers. Revolving credit is about 10% of consumers' outstanding debt. 8) Treatment of Joint Accounts

We consider a joint account to belong to all the individuals on the account. For example, if two consumers hold a joint mortgage, both consumers are considered to have a mortgage for purposes of calculating market penetration data and data on the average number of accounts.

Therefore, users of this report should not attempt to find the average balance per user of a credit type by multiplying the average number of active accounts by the average balance outstanding per active account. Doing so will overstate consumers' average balances. For example, a joint mortgage with a $100,000 balance held by two borrowers does not result in a total of $200,000 in debt. 9) Use of Phrase &uot;Consumer Credit&uot;

The Federal Reserve Bank uses the phrase &uot;consumer credit&uot; to refer to non-mortgage credit held by consumers. In this publication, Trans Union uses the phrase &uot;consumer credit&uot; to refer to all credit, including mortgages, held by consumers. In our publications for more specialized audiences, Trans Union follows the technical usage of the Federal Reserve Bank and other experts.

Copyright Permission

The data in this report and the related historical numbers on our Internet site may be used and quoted freely, as long as the source is identified as &uot;Trans Union LLC's TrenData(TM)&uot;. Trans Union reserves all other rights.