The new year is already in full swing and it appears that national credit bureau TransUnion has some good news on the credit front. According to reports from the annual credit forecast offered by TransUnion, 2011 is expected to experience a significant drop in the consumer delinquencies for mortgage loans and credit cards. In fact, TransUnion predicts that by the end of the year, mortgage delinquencies will decrease by nearly 20%. Credit card delinquencies are expected to also drop by over 10% which is a sixteen year low.

Concerning mortgage loans, delinquent borrowers are categorized by those who are late on payments by 60 days or more. The data released by TransUnion indicates that future foreclosures may also be on the decline if the study is accurate. If indeed the number of mortgage delinquencies continue to fall, it is a strong indicator that the housing market is beginning to stabilize once again. It will also signify the first time since 2006 that the amount of delinquency rates has not increased steadily year after year. The states of Florida, Arizona, and Nevada are listed as the regions set to have the greatest decrease in delinquent mortgage loans.

As for credit card delinquencies, such a status is earned when a card holder fails to make payment in a period of 90 days. According to the predictions of the credit bureau, the drop in credit card delinquencies would be the first decrease since the recession started in 2007. While all 50 states are anticipated to see lower rates of delinquency on credit card accounts, it is in Mississippi, Kentucky, and North Carolina where the highest decline will be seen.

Why the Change?

The changes in the mortgage delinquencies are attributed mostly to the improving unemployment status of Americans. Since there is also a stabilization of the housing market, it seems to have triggered a positive sign of things to come.

As for credit card delinquency declinations, there are a few factors that may have influence over the situation. The CARD Act legislation is one element that is believed to improved things for account holders. Since credit card companies are now limited to how they can attribute fees and penalties, more consumers are finding some relief and able to make more headway at eliminating their credit card debts. There is also evidence that consumers are taking credit card debt much more seriously and being more vigilant about their personal finances in general. As many people enduring financial hardships they historically were not accustomed to experiencing, there seems to be a new understanding and perspective when it comes to managing credit card debt and credit spending.

Credit Cards Still Necessary to Consumers

Despite the good news on the financial front, there is also speculation that with the slow improvement of the economy, consumers will still be highly reliant on credit cards to survive the additional hard times to come. Experts are predicting that while balances will be paid on time each month, consumers have no plans on ending their relationships with their credit cards any time soon. However the lessons in better financial management will likely carry over into the good times and prevent many consumers from going overboard again.

Credit cards may also be harder to get from those who are not credit worthy. Per the CARD Act, minors under the age of 18 are no longer allowed to have a credit card on their own without a parental co-signer or verifiable income. This rule will also eliminate a good majority of cardholder who may pose a higher risk of defaulting or being delinquent on credit card payments.

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