COLUMBIA, Md. — While saying the credit markets and the economy still face hurdles, the National Association of Credit Management (NACM) reported that its October Credit Managers Index (CMI) broke into expansion territory for the first time in over a year.

Continuing its upswing since September, the NACM’s index broke past the 50 neutral barrier in October, signaling further loosening up of credit. The news comes six days after the Commerce Department announced that the economy grew by 3.5 percent for the first time in four quarters.

“Not only has there been some expansion in terms of credit availability, but there continues to be evidence that companies are catching up on their debt,” said Dr. Chris Kuehl, the NACM’s economic analyst. “Over the last few weeks, I have spoken at several NACM events and have heard similar stories at each. Companies that had been behind on their obligations are catching up in anticipation of further growth and the need to ask for more credit in the future.

“By the same token, comments by attendees suggest that there is more money starting to filter into the system, making credit more accessible than it has been in some time,” he added.

Kuehl said four factors led to the positive October reports, including the Cash for Clunkers program, the $8,000 new home-buyer credit and the Federal Reserve keeping interest rates low. The NACM also credited the private sector for the growth in the economy, saying the segment is definitely engaging in the economic comeback.

The CMI data also showed significant improvement in dollar collections and that the amount of credit extended is higher than it has been in well over a year. There were also far fewer accounts placed for collection and fewer applications rejected, which the NACM said indicates creditors are seeing more creditworthy applicants.

The NACM, which represents approximately 19,000 business credit and financial professionals worldwide, also reported that the manufacturing sector finally crested the 50 mark in October. The service sector also showed gains, with the index also moving past the 50 mark.

“The year-over-year comparison is finally showing a clear trend toward growth,” said Kuehl of the CMI, which holds that anything under 50 indicates contraction and that numbers over 50 are growth indicators. “The climb has been steep and awkward and the numbers are far from robust, but the trend is clearly headed in the right direction.”