Lower credit borrowers are increasingly being approved for cross-credit loans, a trend that is expected to continue in 2022 The latest forecast from TransUnion.

Higher risk consumers – due to poor creditworthiness or other factors – make up a growing proportion of auto and personal loan borrowers. TransUnion said this non-prime lending will benefit the entire consumer credit market.

“During the height of the [COVID-19] Pandemic, at a time of great uncertainty, many lenders have pulled back and tightened their underwriting to hedge against risk, “said Charlie Wise, director of global research and advisory at TransUnion.” However, consumer performance has remained strong, which has restored lender confidence . The economy is normalizing and expanding, and these signs of renewed strength are encouraging lenders to focus not only on the least risky consumers but also to provide better access to those who might be perceived as higher credit risks. “

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INFLATION STAYS HIGH FOR 39 YEARS – THAT MEANS THAT FOR INTEREST RATES

Auto, credit card, and personal loans to add to the low credit offering

The number of personal lending is expected to increase in 2022, TransUnion predicts, leading to seven consecutive quarterly increases even over the year higher interest rates. This increase will benefit prime and sub-prime borrowers, as well as borrowers with cheap and also those with lower credit ratings.

The agency also predicts the number of auto loans will rise as well – to 28.9 million from 28.3 million forecast for this year. Non-prime auto loan issuance is expected to increase from 9.4 million in 2021 to 10 million in 2022 and gain market share.

Lending to borrowers is projected to slow slightly from 2021 to 2022 for borrowers with poor credit ratings. However, the TransUnion study shows that they will remain well above the level of credit card calls for 2019 and 2020.

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Americans seek credit as stimulus money dries up

As the federal pandemic-induced stimulus programs wind down, borrowers may soon be looking for additional credit options.

“The consumer landscape is increasingly resembling the pre-pandemic era,” said Wise. “As deferral programs expire and economic funds dry up, demand for credit rises and consumers rethink their credit needs – which is a sign of a booming and functioning economy. 2022 will mark another return to lending in the credit market. which will help fuel the continued resurgence of consumer spending. “

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