Number of borrowers below prime shrinking
New data indicate subprime auto loans are declining, but it’s not the result of big banks such as Wells Fargo exiting the business as much as it is due to consumers’ improved financial status.
John Giamalvo, VP of dealer services for Equifax, told CUtoday.info that the percentage of subprime borrowers in the market has been steadily shrinking.
“A very good amount of this drop in subprime loans and leases is due to the increase in folks’ credit scores,” said Giamalvo. “Consumers’ credit scores have risen substantially over the last couple of years. I think we can draw a pretty clear line for this trend from when the credit bureaus were compelled to remove derogatory posts on a credit file that did not have three identifiers with it, such as name, Social Security number and address.”
Giamalvo emphasized, too, that many consumers today are doing a much better job of managing their finances and concentrating on improving their credit scores.
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