Although a number of new reports indicate consumers have improved their financial management skills and made a conscious effort to pay down their debt, a new study says charge offs are the largest factor contributing to lower balances.
Cardhub.com's recent analysis of Federal Reserve data found that in 2010, nearly all of the decrease in overall debt was linked to consumer defaults, the Huffington Post reports.
However, some experts say while write offs have played a major role in lower debt levels, many individuals have altered the way they handle their credit.
"Charge offs are part of the picture, there's no doubt about that" Gregory Daco, economist at IHS Global Insight, told the news source. "But there has been a change in attitudes to credit, and paying it off."
Yet, some consumers who have changed their behavior and used credit more responsibly may still see credit problems, such as a misreported charge off, on their credit report. This is because creditors and debt collection agencies may wrongly relay information, which ends up on individuals' credit reports.
As a result of these errant items, consumers may end up with a black mark that is unfairly hurting their credit standing. In these cases, individuals may benefit from speaking with a credit repair attorney who may be able to work with the creditors and credit bureaus to remove the questionable item.