CHICAGO -

A new TransUnion study found that people who monitor their own credit files open significantly more new auto loans and credit cards, and perform generally as well on those loans as consumers who do not monitor their own credit.

The company's study determined that consumers who monitor their credit in any given credit score range not only open far more new accounts than those who do not, but it may indicate that these consumers recognized the importance of a healthy credit profile, and are actively looking for ways to improve it prior to making new purchases.

"Our study started with the conjecture that individuals who monitor their credit health might be motivated the same way as people who monitor their physical health," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.

"We assume the latter generally fall into two categories: healthier people who want to stay that way, and less healthy consumers who want to become fit," Becker continued.

"We have found that consumers who monitor their credit tend to fall into two similar groups: credit-healthy consumers who wish to maintain that health and/or guard against identity theft; and riskier consumers that are looking to take proactive measures to better manage their credit profiles in anticipation of acquiring additional credit."

TransUnion's "Impact of Credit Self-Monitoring on Consumer Performance" study revealed that nearly 3.4 percent of consumers who monitored their credit during the study timeframe opened a new auto loan, while only 1.9 percent of consumers who did not monitor their credit opened an auto loan.

Analysts discovered this trend held true for other credit instruments such as general purpose credit cards, where nearly 6.3 percent of consumers monitoring their credit opened new credit cards. They said only 4.3 percent of consumers not monitoring their credit opened new credit card accounts in the same period.

"This finding was a key insight, as consumers who monitor their credit appear to be more receptive to new credit offers and are actively looking to open new accounts at far greater rates than non-monitoring consumers," Becker said.

"Perhaps even more compelling is that the delinquency rates on these new loans in the credit monitoring population are only slightly higher than those of the non-monitoring population when controlling for credit score, indicating that adverse selection, while present to a certain extent, is less of a risk for lenders," he continued.

The study looked at the VantageScore credit score distribution of the credit monitoring population versus that of the non-monitoring population. The credit score distribution of the monitoring consumer group was riskier than the non-monitoring group: 50.4 percent of the monitoring consumer population had non-prime credit scores (VantageScore credit score less than 700), compared to 40.1 percent of the non-monitoring population.

"The difference in score distribution tends to support the theory that many self-monitoring consumers are doing so because they wish to improve their credit profiles," Becker said. "It is also why we have to control for credit score in studies such as this."

In the prime and better risk tiers, the 60-day or worse delinquency rate on new auto loans opened by the credit self-monitoring population was 2.0 percent, compared to 1.5 percent for the non-monitoring population.

Similarly, the 90-day or worse delinquency rate on new credit cards opened by the credit self-monitoring population was 2.5 percent, compared to 1.9 percent for the non-monitoring population.

"While there is an increase in risk among these self-monitoring consumers, that risk remains generally on the same order of magnitude as that of the non-monitoring population. As well, the incremental risk appears to be more than offset by the increase in credit demand," Becker said.

"This is valuable insight for lenders who may be interested in marketing to consumers whom they may not have valued as prospective customers otherwise," he went on to say.

TransUnion's research study examined and analyzed nearly 15 million U.S. consumers during a 2 1/2-year period. The study timeframe looked at consumers who monitored their own credit files over a six-month window from May 2009 through October 2009.

The study then looked at the new loan accounts opened by this population over the subsequent three months and compared it to a control population of non-monitoring consumers over the same period.

Finally, the study measured borrowing/balance activity and payment behavior on those new loans for up to 24 months through November of last year, again comparing these results against those of the control population over the same time period.