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Prior to the recession, many consumers had relatively easy access to credit in general, thanks to many having fairly high credit scores, but the downturn hurt many people’s standings significantly. And as lenders tightened requirements for even previously-qualified people as a way of safeguarding against the high risk of delinquency and default, consumers were left with far less access to credit in general, according to new data from the credit scoring bureau FICO. But now, credit scores are improving again, and borrowers are getting far more access to credit cards and auto loans.
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Meanwhile, even as credit card and auto loan approvals became easier to come by, those for mortgages have only grown tighter, the report said. Through October, just 4.2 percent of new mortgage borrowers had credit scores below 620, compared with 6.6 percent in April 2010, and 18.2 percent prior to the recession’s onset in October 2006. Further, while the number of mortgages being issued rose by slightly less than 400,000 over the last 30 months, it too, is still well below pre-downturn levels.
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Lenders may be more cautious about granting mortgages because of the significant investment they’re making in a borrower by doing so. And with the housing market still somewhat tenuous, many may still fear another bubble.
Image: Hemera
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