Credit Gap Continues To Grow, Survey Reveals

Posted by Shane Tyler on September 8 2010 @ 10:05 am

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Bankers expect more Americans to be denied credit in the future The number of Americans who may be eligible to receive competitive rates on credit cards, auto and mortgage loans may be declining. A recent FICO survey shows that the gap in those deemed creditworthy and those considered subprime borrowers continues to widen.

According to the survey data, 73 percent of participants estimate that new applications for credit will increase or remain steady in the next six months. However, 38 percent of bankers report that they expect the approval rate for new credit requests to drop during that period. Many of the financial professionals polled also said that they expect delinquencies for credit cards, auto loans and mortgages to climb, supporting their claims that fewer Americans will be able to access new credit.

"Banks remain concerned about loss prevention. Government data released in August indicates personal bankruptcies are at their highest levels in five years, and other recent data confirms the ongoing challenges in the employment and housing sectors. This type of economic environment makes it difficult for lenders to open up the flow of credit without taking on significant risk," FICO chief research officer Andrew Jennings said.

Many Americans have turned to credit counseling as a means of both seeking debt relief and gathering educational resources to help them boost their financial condition.

Timely articles written by the Editors at DRC

New government regulations in place for consumers in need of debt relief for credit cards and other unsecured debts.

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