New Credit Growth Strong in 2011 November Data
Here is a summary of the Equifax Origination Credit Trends report. This report is based on data available with a two month lag to capture the most accurate representation of the data. So the conclusions here are based on end of Nov 2011 data.
US new credit grew 12.6% (went to 729B$ in Jan to Nov 2011 from 647B$ in Jan to Nov 2010) following the trend in previous months. The growth is evident in origination loan volumes, risk accommodation and credit dollars. 2011 loan volumes are higher than 2010 for Auto Bank, Auto Finance, Bank card, Consumer Finance and Student Loans. On the other hand, recent pull back in Home Equity Lines erased year-to-date increases. US Auto Loan originations have gone up by 12.8% after going up 13.6% in 2010.
Total New Credit (dollars) on a year-to-date basis is 13% higher than the recession low in 2009, but 44% lower than the pre-recession high of 2006.
Changes in underwriting are evident in higher risk (Sub Prime) underwriting loan volume growth. Auto Bank, Auto Finance, Bank card, Consumer Finance and Retail Card Sub Prime loan originations are off recession lows. An artifact of the recession has been lower, more judicious new loan amounts, which are now, in some instances, easing. There are some suggestions that Bank card credit limits are increasing accounting for reporting changes’ influence on origination Bank card credit limit data. Loan or line size easing is evident in Auto Bank, Auto Finance and Retail Card, especially lower risk ranges. Underwriting for Home Equity Revolving Lines, in contrast, has not eased and loan originations today reflect even lower risk populations with generally smaller lines.
The number of Student Loans for 2011 on a year-to-date basis tracks the highest for the past 6 years available; corresponding Student Loan dollar amounts are flat for the past 3 years. (Lender role changes took place around 2009.)
If you want to learn more about Credit Trends reach out to your Equifax representative or send us an e-mail.
This post was contributed by: Lee Grice.