Some Significant Shifts in the Credit Industry
A new survey shows some noteworthy shifts taking place in the credit industry. Rejection rates for credit applications are declining and more consumers plan to apply for credit during the next 12 months.
The New York Federal Reserve’s Survey of Consumer Expectations now includes a Credit Access survey which analyzes consumers’ experiences and expectations regarding credit demand and credit access. Three times per year, 1,200 consumers are asked whether they applied for credit in the past 12 months and what the results were. In addition, they are asked if they expect to apply for credit during the next 12 months. The New York Fed gathers this data for five specific credit products: auto loans, credit cards, credit card limit increases, mortgages and mortgage refinancing.
According to the latest survey results, new applicants for credit remained steady over the past year and a half but rejection rates dropped from 30% in October 2014 to 25% in February 2015.
Also, respondents who asked for a credit limit increase and got rejected dropped from 38.5% last October to 24.3% in February.
The number of people who plan to apply for credit cards over the next 12 months rose from 7.8% in October to 11.6% in February.
One negative note from the survey had to do with mortgages. The number of people getting rejected for mortgages has increased from 15.1% in February of 2014 to 24.5% in February of 2015.
The full report from the New York Federal Reserve SCE Credit Access Survey is available here.