Originations Increase as Payment Patterns Improve, Reports Equifax
Equifax’s national monthly report showed increases in originations for auto, bankcard, consumer finance and home equity revolving lines on a year-to-date basis.
ATLANTA — Equifax’s latest national report on consumer credit trends showed that U.S. consumer credit is continuing to show signs of improvement as the recovery progresses and despite continued unemployment and housing issues.
The analysis reflected increases with originations for auto, bankcard, consumer finance and home equity revolving lines on a year-to-date basis this year from March 2010. Total new credit available from March 2010 to March 2011 is well below pre-recession levels but has increased more than 15 percent since 2009 to $167 billion.
Deleveraging continues but early signs of portfolio expansion are evident in auto lending growth and increases in credit card limit increases.
"Despite concerns of the economy relapsing, several current metrics indicate the credit cycle is stabilizing — even growing somewhat as consumer payment behavior improves," said Michael Koukounas, Equifax's senior vice president of client services.
Key findings included an upward trend in risk scores, with the average Equifax Risk Score reaching 695 in May 2011. Additionally, the percentage of high risk scores dropped, signaling improvement in payment behavior.
Bank credit card origination increased more than 35 percent, while new home equity originations increased 6 percent on a year-to-date basis — the first increase since 2006.
Total consumer debt is down $1.1 trillion and now stands at $11.3 trillion. The report also showed that new consumer finance credit limits increased for the first time since 2007 with a slight increase of 1.5 percent.
Auto loan originations also rose by nearly 12 percent since March 2010 and are up 21.4 percent on a year-over-year basis. Equifax also noted increases in subprime originations.
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