Equifax National Trends Report – Bankcard and Auto Loans Have Increased
Equifax, one of three consumer credit reporting agencies that houses over 200 million consumer credit reports and markets and sells consumer credit scores, released their latest National Trends Report the end of September. Equifax used data from their consumer and business databases to provide consumer credit information on the following markets: auto, banking, credit cards, mortgage and student loans. The study showed growth in auto and bankcard. There was more new credit available in the first half of 2011 (January thru June 2011) compared to the last two years. There was $370 billion in new credit available from January to June 2011, compared to $327 billion in the same period in 2010, and $338 billion in the same period in 2009.
The number of auto loan originations increased 15% from January to June 2011, compared to the same period in 2010.
Auto loans totaled 9.6 million in the first six months of 2011, 8.3 million in same period for 2010 and 7.5 million in same period for 2009. This is still lower than the pre-recession (2006 to 2008) levels of more than ten million.
Loan amounts for January to June 2011 increased by almost 17% over same period in 2010, but were still behind pre-recession levels.
Luxury car lending (over $40,000) in June exceeded pre-recession levels in June 2007.
Subprime loans, an Equifax credit score below 600, issued by banks, credit unions or savings and loan associations represented10% of auto originations; compared to 25% of loans issued by auto finance companies.
New bankcard originations were up 27% in the first six months of 2011 compared to the same time frame in 2010.
New bankcards totaled 18 million for the first half of 2011, which was a three-year high; compared to pre-recession levels of 34 million from January to June 2007.
Subprime borrowers, an Equifax credit score below 660, represented 31% of new bankcard accounts or 5.4 million in the first six months of 2011; this was 64% above the same time frame one year ago.
Credit limits on new accounts in the first half of 2011 increased 27% over the same time frame in 2010; credit limits on new accounts for subprime consumers in the first six months of 2011 increased by 68% over the same period in 2010.
The number of delinquencies declined to pre-recession levels, but the average balance amount increased from $3,025 in August 2006 to $3,500 in August 2011.
Student loans increased for those 24 years old and above.
In the past three years there has been continued increase in student loans for the following age groups: 30 to 39, 40 to 49 and 50 to 59.
According to Michael Koukounas, Senior Vice President of Special Client Services for Equifax, “Auto lending continues to be one of the most promising lending sectors today based on the data. If this momentum can be maintained through the remainder of the year, 2011 year-end totals should reflect a comparable return to normalcy to pre-recession lending levels. The latest Credit Trends data clearly indicates a continuation of increasing numbers of bankcard originations and higher new bankcard credit limits. While bankcard origination numbers are still far from their pre-recession levels, bankcard delinquency levels have actually declined below pre-recession levels and I expect a continuation of this trend in the near term.”
Credit Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. Follow him on Twitter here.