Even though the economy has been on the mend for some time now, it hasn’t been easy for consumers with even good credit scores to obtain the kind of financing they want. However, it looks like banks are becoming more willing to lend now.
Credit conditions are becoming slightly easier for a number of popular types of financing, including credit cards, according to the latest survey from senior bank officials conducted by the Federal Reserve Board. For example, while 50 of the 54 institutions that issue credit cards say that their standards have remained more or less the same over the past three months, the other four say that they’ve made it slightly easier for applicants to obtain credit cards. The same is largely true of auto loans, as seven of 58 institutions said they loosened qualification requirements, while one tightened them, and the other 50 held them more or less steady. Other consumer loans were also made easier to obtain by two of 62 institutions, with none tightening standards.
Further, when it comes to credit card accounts, credit limits have grown larger in general as well, the report said. In all, only one of 48 banks said it tightened the size of the average credit limit it extends to consumers on these accounts, while five eased them somewhat, and one eased them considerably. The remaining 41 held them more or less the same. One bank also significantly loosened requirements for monthly minimum payments.
Minimum credit score requirements also slipped for four of the 48, with only one tightening them, and the same numbers also said that they were willing to extend this type of financing to consumers that did not meet their requirements.
Interestingly, mortgages — which have long been the most restrictive in the financial industry — are also becoming slightly easier to get, the report said. Six of the nation’s 64 mortgage lenders surveyed said they had eased credit standards slightly, with only one saying it made them more restrictive.
Banks may be more willing to extend consumers credit because of the improving economic conditions observed nationwide, and also because borrowers have largely been able to markedly reduce rates of delinquency and default across more or less all loan types in the last several years.