A new study developed by TransUnion finds that consumers with multiple account relationships with the same lender outperform consumers who maintain only one relationship with that lender, with the biggest improvements in delinquencies seen among mortgages.
The Chicago-based credit reporting firm looked at data from six super-regional financial institutions — three banks and three credit unions — each December from 2007 to 2009. Approximately 19 million consumers were included in each snapshot, and more than 400 million tradelines were evaluated in each time period. The study examined the correlation between the number of consumer accounts that were 30 days or more delinquent and the number of accounts the borrower held with the target lender.
In virtually all cases, delinquency levels on first mortgages, home equity lines of credit (HELOCs), credit cards, and auto loans decreased considerably as the total number of relationships the borrower had with a lender increased.
The most dramatic shift in delinquency was seen with first mortgages. In December of 2009, the study found that borrowers whose only credit relationship with their lender was for their mortgage had a 30-day or worse delinquency rate of 4.8 percent.
However, this delinquency level dropped 17 percent to 4 percent if the borrower had two relationships with the lender. That rate dropped further to 2.8 percent with three relationships, 2.3 percent with four associations, and down to 1.9 percent with five or more relationships…
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