While federal lawmakers have been bickering over plans to raise the U.S. debt ceiling, consumers have been increasing their own borrowing capacity in the form of auto loans, credit cards, student loans and home equity lines of credit.
That's according to a recent national report about credit trends from Equifax, a global credit information service headquartered in Atlanta.
The company reported that consumers are doing a better job of paying debts, and lenders and credit issuers now perceive their portfolios of consumer loans as being less risky than they were at the height of the financial crisis and economic recession.
"Several portfolio metrics indicate the credit cycle is moving to stabilization and growth. In general, payment behavior has improved and loan portfolios are lower risk. Write-offs have peaked, spurring origination momentum," Equifax explained in a statement.
That "momentum" translates into more consumer credit being offered and accepted. According to Equifax, total new credit available increased from $209 billion year-to-date in April 2010 to $240 billion in April 2011, an increase of nearly 15 percent.
That was substantially less than the growth of new credit in the 2006-07 period, but the upswing is notable because it follows four years of declines, Equifax said.
Credit cards, and especially new subprime credit cards offered to consumers who have less-than-stellar credit, were a big part of the mix in the newly available credit.
In fact, new subprime bank card originations were up a whopping 80 percent in April 2011 compared with the same month a year earlier. New subprime bank card origination levels for the first four months of 2011 were up more than 66 percent compared with 2010 levels. Total credit limits were up as well.
While Equifax might not have all the consumer credit records on the entire planet, its statistics are based on more than 200 million credit files. That's a lot of data.
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