Equifax Reports Credit Levels Upby Steve Cypher on Saturday, December 29th, 2012
Car buyers seeking high risk car loans might want to check out the latest results of the National Credit Trends Report from Equifax.
Here at Auto Credit Express we think the results might be especially helpful for consumers who currently plan on applying for bad credit auto loans. We believe this because we’ve spent the last two decades helping consumers with auto credit problems find the right dealers for their best opportunities at approved auto loans.
We also believe it’s important that people with credit problems understand the automotive lending environment before applying for a loan – which is why the latest report from Experian could prove to be especially informative.
Consumer credit trends
On December 20th, Experian released the latest results of its National Consumer Credit Trends Report noting that, according to Equifax Chief Economist Amy Crews-Cutts “Consumer spending is being supported by gradually opening credit markets, with higher new limits on accounts, a gradual upward trend in non-mortgage consumer debt outstanding, and also consistently low utilization rates.”
Ms. Cutts also went on to state that “Meanwhile, consumer finance delinquency rates, not including home loans, have returned to pre-recession levels — all signs that the consumer-led recovery is gaining strength heading into 2013.”
A portion of the report addressed auto loans. This is what it had to say:
• Auto loans originated year-to-date through September 2012 totaled 16.4 million – an increase of more than 11% from same time a year ago and a five-year high.
• At more than 58 million through November 2012, the total number of outstanding loans is at its highest level in 37 months.
• Similarly, auto loan balances continue rising – through November 2012, balances totaled $775.7 billion, a 45-month high.
• Auto loan amounts originated year-to-date through September 2012 ($318.2 billion) are more than 33% higher than the recession low for same time in 2009 ($210.2 billion).
Higher-risk auto loans
Taking this latest information into consideration, it could have the following effects on car loans for car shoppers with low credit scores:
• Lending continues to improve, although the interest rates for most subprime car loans probably won’t be dropping and down payments will still be required from most near-prime and lower lenders.
• With the increasing number of buyers with weak credit requesting auto loans, most low credit lenders can still afford to be selective in approving applications.
With that in mind, credit-challenged applicants should consider these tips:
• Know your credit scores and what’s in your credit reports.
• Pick an affordable car with a payment under ten to fifteen of your gross monthly income (the lower the better).
• The higher the down payment, the better. Not including rebates or dealer cash, 15% or more will increase your chances of an approval.
As we see it
Car loan applicants with poor credit should know that auto lending is improving. Even a credit denial from a conventional lender doesn’t mean the only alternative is a BHPH car dealer
One other thing to remember: Auto Credit Express matches consumers with poor car credit with those new car dealers that can offer them their best chance for auto loan approvals.
So when you’re ready to reestablish your good credit, you can begin the process by filling out our online car loans application.