Equifax Report: Americans Paying Off Debt & Opening New Lines of Credit

March 28, 2013

More LoansAmericans are taking out more loans than they have in past years, according to a recent article on the Equifax Finance blog, “

More Americans Paying Off Debt and Opening New Lines of Credit.”

The article cites a recent Equifax Credit Trends report that showed loan originations (not including mortgages) increased to $750 billion in 2012 from $659 billion in 2011. This is down more than $400 billion from the pre-recession peak, but it is a sign that Americans are on the road to recovery.

The drop in loan originations is due to economic factors, like fewer people taking out home loans because they lost equity or were underwater in their homes, or were just worried about the economy. Since 2010, lending has increased, especially auto loans and credit cards. For the housing market, loan origination is growing, but is still down. The article explains that this is due in part to stricter post-recession lending requirements, which is evidenced by the proportion of prime risk consumers (those with the least credit risk and credit scores of 700 or greater); 80 percent of today’s home loans are for these individuals. Before the recession, that group only made up half of the buyers. The growth the market has seen is due to Americans taking advantage of recent low interest rates.

The article points out that the $65.5 billion in loans taken out in 2012 is only a mere fraction of the $295.2 billion taken out in 2006. And, while the number of mortgage originations is increasing, the amount of mortgage debt that Americans are carrying is decreasing, down to $8.4 trillion from $9.8 trillion in 2008.

Get more stats and information on consumer debt and mortgage debt trends in the full article on the Equifax Finance blog, where you can also find articles on financial management, credit,

identity protection, retirement and more.

Categories: Economy

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