Report from Equifax, Moody’s Shows Uptick in Originations

Recently released findings from ""Equifax's"":www.equifax.com/ March ""National Consumer Credit Trends Report"" and ""CreditForecast.com"":www.creditforecast.com/, a collaborative venture from Equifax and ""Moody's Analytics"":www.moodysanalytics.com/, revealed that originations are on the uptick, with notable increases in the sub-prime segment across all lending sectors.

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The survey, which evaluated activity for credit cards, auto finance, consumer finance, and student loans, showed that home financing balances fell to $8.7 billion during February.

According to the report, total consumer debt in the U.S. stood at $11 trillion for February, representing an 11 percent drop since highs seen in the fourth-quarter of 2008. The study attributed

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the decline in the debt tally to a 12 percent decrease in home financing balances during the same time period.

Significant statistics from the report included a rise in new credit between December 2010 and 2011, with data demonstrating a 10 percent increase over levels recorded in 2009 and 2010. However, the groups behind the analysis pointed out that new credit remains below pre-recession levels.

In the consumer finance sector, newly originated loans rose by 4 percent on a year-over-year basis to end 2011, and consumer finance delinquency rates improved, dropping by 7 percent during February to reach the lowest level seen since July 2007. Additionally, the number of loans given to high-risk consumers declined to 33 percent of the market share in February, with 39 percent of consumer loans going to low-risk borrowers.

Commenting on the results of the report, Equifax's chief economist, Amy Crews Cutts, said, ""The evidence of increased lending to sub-prime consumers demonstrates banks' ongoing efforts to grow lending by providing credit opportunities to more consumers.""

Crews Cutts continued her statements, noting, ""Year-over-year results show borrowers are taking advantage of the new opportunities and seeking to diversify their financial activity, which is building momentum toward economic improvement.""