Despite sales being off by nearly 40 percent from the first three months of last year, credit-application rejections increased 329 percent from the same period last year, according to CNW Research.
Looking at the first quarter, the Bandon, Ore.-based market research firm reported that 728,891 applications were rejected. For the same period last year, 221,519 applications were rejected. During the same quarter of 2006 and 2007, lenders rejected 188,613 and 103,108 applications, respectively.
CNW said applications rejected this year were also within 3 percent of the average credit ratings approved in 2006.
Additionally, the number of prime (680) loans approved dropped from 77.59 percent in March 2007 to 63.75 percent for same month this year. Near-prime loans (620-679) dropped from 55.64 percent to 49.64 percent. As for subprime applications, approvals dropped 23.47 percent to 6.78 percent.
In 2006, the high point for loan approvals in a four-year span, approvals for prime, near-prime and subprime stood at 86.47 percent, 58.83 percent and 37.44 percent, respectively.