News & Resources

Lenders expect auto loans will become easier for low consumer credit scores

Jul 18, 2012 Philip Burgess

A recent survey found that lenders are anticipating that the automobile loan market for consumers with damaged or no credit will improve in the coming months. According to a recent report by FICO, more than half of surveyed lenders expect car loans will become easier to gain access to by borrowers with low credit scores this year. Another 38 percent expect that more credit cards will be issued to these subprime borrowers in 2012, while only 12 percent of lenders said residential mortgages will be the easiest loan to be approved for. Overall, the majority of respondents believe that delinquency rates will decrease this year, with consumers and financial institutions alike becoming more confident with the improving economy, the survey found. "We are clearly seeing a loosening of credit in the auto finance market, with lenders responding to increased consumer demand," said Dr. Andrew Jennings, chief analytics officer at FICO. "This is good news for car dealers and it should help the auto sector continue its recovery." In order to help those consumers with lower or damaged credit scores have access to car loans, recently announced that it has launched a new redesigned website which helps users shop for suitable financing options and payment methods. Company officials say this was done in order to accommodate the increasing auto market.