Loans to low-credit borrowers could increase in 2022, TransUnion forecasts
Borrowers with lower credit scores are increasingly approved for loans on multiple types of credit, a trend expected to continue in 2022, according to Latest TransUnion Predictions.
High risk consumers – due to low credit scores or other factors – represent a growing share of auto and personal loan borrowers. TransUnion said these non-senior loans would benefit the entire consumer credit market.
“At the height of the [COVID-19] pandemic, many lenders have pulled out and tightened underwriting to hedge risk in a time of great uncertainty, ”said Charlie Wise, head of global research and advisory at TransUnion. “However, consumer performance remained strong, which restored lender confidence. The economy is normalizing and continuing to grow, and these signs of renewed strength encourage lenders not only to focus on less risky consumers, but to provide better access to people who may be considered to be at risk of risk. higher credit. “
If you have a poor credit history, you may still be eligible for a loan as lenders increase their offers. If you need a personal loan for debt consolidation to reduce your monthly payments or for a home renovation project, visit Credible to find your personalized interest rate and get prequalified in minutes without affecting your credit report.
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Auto, Credit Cards, and Personal Loans to Extend Low Credit Offers
The number of personal loan originations is expected to increase in 2022, according to TransUnion forecasts, creating seven consecutive quarterly increases even as the year brings higher interest rates. This increase will benefit both senior and non-senior borrowers, as well as those with favorable credit scores and those with lower credit scores.
The agency also predicts that the number of auto loans will also increase – to 28.9 million from the 28.3 million forecast for this year. Non-privileged automobile loan arrangements are expected to increase from 9.4 million in 2021 to 10 million in 2022 and gain market share.
Credit card issuance is expected to slow slightly from 2021 to 2022 for borrowers with poor credit scores. However, they will remain well above credit card issuance levels for 2019 and 2020, according to the TransUnion study.
If you are looking for credit card or loan options but have a low FICO score, visit Credible to compare multiple credit cards at once and choose the one whose benefits and loan terms suit you the most.
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Americans look to credit as stimulus money dries up
With the end of the pandemic-induced federal stimulus packages, borrowers may soon be looking for more credit options.
“The consumer landscape is starting to look more like the pre-pandemic era,” Wise said. “With the forbearance programs expiring and stimulus funds drying up, the demand for credit is increasing and consumers are reassessing their credit needs – a sign of a buzzing and functioning economy. The year 2022 will mark a continued return to lending in the credit market, which will help fuel the continuing resurgence in consumer spending. “
If you need a personal loan to help you pay off other high interest debt, or if you’re curious about your credit options, contact Credible to speak to a credit expert and get all your questions answered.
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