Consumers falling behind on dept payments

No surprise here.

U.S. consumers are falling further behind on their debt payments even as both borrowers and lenders struggle to keep the debt burden from getting even heavier in the face of a worsening recession and employment picture, a credit bureau executive told Reuters.

Dann Adams, president of U.S. Information Systems for Equifax Inc , said consumers are missing payments on mortgages, credit cards and auto loans, prompting lenders to further scrutinize borrowers' profiles for signs they should clamp down on credit.

"Lines of credit are being very closely monitored," said Adams, whose clients include banks struggling to prevent more bad debt from piling onto their balance sheets.

Banks are, for example, warily watching their credit card portfolios in anticipation that consumers whose home values are plunging will turn to credit cards as their home equity lines of credit are cut or canceled.

They are also preemptively culling inactive cards, seeing them as a potential liability: "If the consumer gets in trouble with someone else they'll start using the bank's card, and the bank doesn't want them to do that," he said.

Customers whose credit scores are on a downward trend are finding themselves on the receiving end of more aggressive action to limit or cut off credit.

And more lenders are requesting an Equifax product called "bankruptcy scores" that expresses the probability that an individual will be bankrupt over the next one to two years, Adams said.

Equifax cashing in from chaos. It's a natural move in this environment but it's still unsavory to be touting services like this. I see the point but someone could just as easily get on such a list and we all know how watch lists work.